Defensive shares under pressure

The BSE IT, Healthcare and FMCG index are down by upto 1% compared to 1.4% rise in the S&P BSE Sensex

Shares of defensive sectors companies like information technology (IT), pharmaceuticals and fast moving consumer goods (FMCG) are trading lower by up to 4% in otherwise strong market. The Bombay Stock Exchange (BSE) IT, Healthcare and FMCG index are down by nearly 1% compared to 1.4% rise in the benchmark S&P BSE Sensex at 1310 hours.

TCS, Wipro, Infosys and Tech Mahindra from IT sector, ITC, Dabur India and Colgate Palmolive from FMCG pack and Sun Pharmaceuticals, Dr Reddy’s Laboratories, Lupin and Ranbaxy Laboratories from healthcare index are down 1-2%.

In past three months, all these three sectors have underperformed the market by recording less than 8% return as against 11% jump in benchmark index.  FMCG index however, was down 1% during the period.

According to market analyst most of the defensive stocks are richly valued whereas stocks with low valuations do not have adequate growth visibility.

Meanwhile, the weaker rupee has improved competitiveness for the IT/business process outsourcing sector, where its sector outlook is stable, says Moody's Investors Service in a report.