Indian Consumer Stocks Stand Out as Poll Results Spur Selloff
(Bloomberg) -- Shares of consumer goods companies emerged as a bright spot in India even as local stocks tumbled following election results that showed a much tighter outcome for Prime Minister Narendra Modi’s party.
Most Read from Bloomberg
Modi Vows to Retain Power Even as Party Loses India Majority
Short Sellers in Danger of Extinction After Crushing Stock Gains
BlackRock, Citadel Back Texas Stock Exchange in Challenge to NYSE
Bonds Rally as Traders Reload Fed Bets After Data: Markets Wrap
The Nifty FMCG Index, climbed as much as 1.3% on Tuesday, making it the only sectoral gauge to rise. In contrast, the benchmark NSE Nifty 50 dropped as much as 8.5%, it’s biggest intraday dip since March 2020.
A weak government may be forced to appease the electorate and ramp up welfare spending, a move which may spur consumer demand in the economy. That’s probably boosted stocks from the sector, with Hindustan Unilever Ltd., rising over 6% and liquor-maker United Spirits Ltd. advancing 4.6%.
READ: India’s Markets Tumble as Election Much Tighter Than Forecast
“There is now a fear that the new government would turn more welfarist and less reformist,” said V K Vijayakumar, chief investment strategist at Geojit Financial Services. That’s has triggered a flight to these defensive plays, he said.
Nestle India Ltd. jumped as much as 3.2%, while Colgate-Palmolive India rose 4.9%. Retailers Avenue Supermarts Ltd. and V-Mart Retail Ltd. also gained.
Most Read from Bloomberg Businessweek
Startup Brings New Hope to the Pursuit of Reviving Frozen Bodies
The Budget Geeks Who Helped Solve an American Economic Puzzle
Disney Is Banking On Sequels to Help Get Pixar Back on Track
©2024 Bloomberg L.P.
