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Stocks of fast-moving consumer goods companies are likely to remain range bound with a negative bias next week, due to a mix of profit booking and weakness in market. Over the past few months, FMCG stocks have advanced smartly, even outperforming the market. Investors could now look at booking profits in these stocks. Yesterday, the indices shed 1% each as investors got jittery over how the US could avoid a fiscal cliff and sold heavily in the last hour of trade.
The Bank Nifty, BSE Auto and BSE Realty lost 1.6-4.0%. The BSE FMCG index too was down 1.36%. Investors will keep a close watch on US President Barack Obama's meeting with US Congress leaders to discuss measures to lower its debt and avoid a fiscal cliff. However, the correction in FMCG shares is likely to be limited still have buy rating on these stocks because of strong fundamentals. Demand side factors for FMCG companies remain strong in India and these companies continue to invest in this market to boost sales.
