Four of the 13 sectoral indices on the Bombay Stock Exchange today hit all-time highs, amid the benchmark Sensex gaining 310 points.
The FMCG (fast moving consumer goods), auto, bankex and healthcare indices touched their respective life-time highs during the day. Spurred by a strong showing in the ITC counter, the FMCG index emerged top performer, climbing as much as 124.79 points (3.5 per cent) to close at 3,687.89. In intra-day trading, the index had touched an all-time high of 3,707.13, as stocks of food-to-cigarette giant ITC surged nearly five per cent to Rs 176.60.
Moreover, ITC contributed the most to the 30-share Sensex, which soared 311.35 points to a 32-month high of 19,906.10.
“FMGC companies are seeing an upsurge on the back of good monsoon and onset of festive season. Also, the broader market is boosting the investor sentiment,” said Geojit BNP Paribas’ research head, Alex Mathews.
In line with the strong market sentiment, the bank index also witnessed a great trading day and rose over 200 points to its lifetime high of 13,945.37 points. Of the 14 scrips constituting the Bankex, 11 ended the day on a positive note, while three finished in the red. Axis Bank rose 2.4 per cent and ICICI by 1.15 per cent.
“Banking stocks are lifting the broader market for quite some time. Also, foreign institutional investors are pouring in large amounts of money in the domestic market. Indian banks are in a better position than peers globally,” Mathews added.
The auto index also saw a stellar performance and reached its all-time high of 9,407.08 points in the intra-day session. Among the auto stocks, the highest increase was witnessed in the two-wheeler major, Hero Honda, which shot up four per cent to end the day at Rs 1,819.80. And, the healthcare index zoomed nearly 57 points in intra-day trading to touch 5,898.97.
FMCG’s month-long rally
In today’s FMCG rally, apart from ITC trading at its all-time high of Rs 176.6, so did Colgate Palmolive (Rs 859.6) and Nestle (Rs 3,299).
The FMCG Index, in fact, has been outperforming the Sensex in the past month. The Sensex rose 8.2 per cent from August 20 to September 20, while the FMCG Index was up 9.3 per cent during the period.
Analysts tracking the industry attribute today’s rise, in particular, to defensive buying in anticipation of a correction once the Sensex crosses the 20,000-mark. “There was no other trigger in the marketplace,” says Anand Shah, senior FMCG analyst at Mumbai-based brokerage firm Angel Securities. “We continue to be underweight on FMCG.”
Some others, however, say commodity price inflation led firms to raise prices. Financial year 2009-10 was marked by price cuts, as companies feared consumers were not in a position to take price rises, owing to drought, food inflation and a general tendency to save more and spend less on account of the downturn in the global economy. This year consumer product firms have been encouraged to do the opposite, thanks in part to a good monsoon, which continues unabated even in September, when rainfall begins to taper.
