FMCG and consumer durable sector shares extended losses for the second day on Tuesday, reversing the initial boost following the Union Budget 2025-2026. The two sectoral indices were among the very few in red today, while benchmark indices NSE Nifty 50 and BSE Sensex jumped as much as 1.2 percent.
The Nifty FMCG index was down 0.43 percent, while the Nifty Consumer Durables index was hovering 0.31 percent lower in the afternoon trading.
Top losing stocks on FMCG, Consumer Durable indices today
Shares of United Breweries were the top loser on the Nifty FMCG index; the stock was down 3.22 percent at Rs 2,122 apiece. It was followed by Godrej Consumer Products (down 1.72 percent to Rs 1,136). Recently listed ITC Hotels shares were down 1.68 percent at Rs 169; Colgate was down 1.5 percent at Rs 2,722; Britannia was down 1.36 percent at Rs 5,028.
Shares of Bata India were the top loser on the Nifty Consumer Durables index, falling as much as 4.11 percent to Rs 1,358 apiece. This was followed by Blue Star (down 2.73 percent to Rs 1,992); Crompton (down 2.67 percent to Rs 359); Cera (down 2.24 percent to Rs 6,767); Havells (down 2 percent to Rs 1,626); Voltas (down 1.78 percent to Rs 1,376); Titan (down 1.43 percent to Rs 3,529).
Bluechip stocks of Hindustan Unilever and Nestle India were also trading in the red.
Consumer stocks that rose today
Although majority of these stocks were in red, few major FMCG and consumer durable companies bucked the trend. Dabur, Kalyan Jewellers, Marico and others were trading in the green.
Finance Minister Nirmala Sitharaman on February 1 announced changes to the existing income tax slabs under the new tax regime, effectively giving full tax rebate on total incomes of up to Rs 12.75 lakh per annum. The Finance Minister also raised the basic exemption limit under the new tax regime from Rs 3 lakh to Rs 4 lakh.
Immediately after the Budget was released, several market experts noted that the additional money accumulating in the hands of the taxpayers due to the change will effectively boost consumption. Consumption stocks had surged on February 1 after the announcement.
Budget boost for consumer stocks fizzles out, as reality checks in
However, on February 3, the stock prices saw a strong decline, breaking the 3-day gaining streak.
Neelkanth Mishra, Chief Economist, Axis Bank, said the market was misinterpreting certain economic signals and its impact amidst the heat of the Union Budget 2025 announcements. "I'm quite surprised by how the market seems to be interpreting it (the impact of the budget proposals including tax breaks) all across the consumption sectors… Some believe this (the tax breaks) will boost consumption, I don’t think that’s the case. Personal income tax-to-GDP is still expected to increase by FY 2026, despite the tax cuts," he said.
Vikas Khemani, Founder, Carnelian Asset Advisors said that the initial gains for the sectors were short term in nature. "Most consumer stocks are quite expensive and hence we don't want many, but we have select stocks which we like. The idea is to kind of look at stories with respect to volume favour," he said.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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