BoA ML downgrades FMCG stocks to 'underweight' from 'overweight'

Bank of America Merrill Lynch (BoA ML) has downgraded stocks in the fast moving consumer goods (FMCG) space from 'overweight' to 'underweight'. The foreign brokerage says valuations of Indian staples have soared, diverging from their global peers.

"Multiples for Indian staples have defied gravity recently. They have increased even as multiples for staples in the emerging markets (EM) are flat to falling. This is not typical," Sanjay Mookim and Nafeesa Gupta, analysts at BoA ML, wrote in a note.

The BSE FMCG index, a gauge for the performance of consumer stocks, on Thursday fell for a seventh straight trading session. Some of