FMCG Stocks Outlook for the week – 12 to 16.12.2016
FMCG Stocks Outlook for the week – 12 to 16.12.2016
( www.rupeedesk.in )
The shares of fast moving consumer goods are likely to rise next week, in line with the expected positive trend in the
broader market. FMCG stocks can see a rise of nearly 2% next week on account of a strong closing of Nifty 50
yesterday. Investors in the broader market will keep a close eye next week on the US Federal Reserve's
announcement on Wednesday of its monetary policy.
The FMCG sector gained over 2% this week and showed some relief in short term despite being among one of the
worst-hit sectors due to demonetisation. On Nov 8, the government had withdrawn notes of high-denomination from
circulation which led to a cash crunch among consumers, resulting in subdued demand in various sectors, including
FMCG.
We expect a slowdown in demand for consumer staples over the medium term on account of the cash crunch, which
may hit earnings of FMCG companies. Recovery by the end of this fiscal year looks difficult. Nifty FMCG index,
which ended 2.2% higher this week, is expected to test its immediate support at 20400 points, below which it could
decline towards 20100. Resistance for the index is seen at 20900-21100 points.
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FMCG Stocks Outlook for the week – 12 to 16.12.2016
