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We expect stocks of fast moving consumer goods companies to remain muted in the week ahead as investors will focus on high-beta sectors such as infrastructure and capital goods as state elections results are announced on Sunday. Investors will focus on stocks of basic industries. If the Bharatiya Janata Party wins elections in most of the states then infra and capital goods stocks will outperform. FMCG stocks, at most will move in the direction of the market. We believe that only in case BJP fails to make impressive gains will stocks of defensive sectors such as FMCG, pharma and information technology outperform. While near-term stock movement will depend on the election outcome, we are turning cautions on FMCG companies as most of them are witnessing higher input prices and have not been able to hike prices owing to the sluggish economy. We are suggesting muted demand growth in larger categories like soaps and detergents till date during the quarter. Therefore, in our view, companies would be cautious in implementing price hikes.
We expect stocks of fast moving consumer goods companies to remain muted in the week ahead as investors will focus on high-beta sectors such as infrastructure and capital goods as state elections results are announced on Sunday. Investors will focus on stocks of basic industries. If the Bharatiya Janata Party wins elections in most of the states then infra and capital goods stocks will outperform. FMCG stocks, at most will move in the direction of the market. We believe that only in case BJP fails to make impressive gains will stocks of defensive sectors such as FMCG, pharma and information technology outperform. While near-term stock movement will depend on the election outcome, we are turning cautions on FMCG companies as most of them are witnessing higher input prices and have not been able to hike prices owing to the sluggish economy. We are suggesting muted demand growth in larger categories like soaps and detergents till date during the quarter. Therefore, in our view, companies would be cautious in implementing price hikes.
