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Rupee weakness weighs down FMCG stocks, but shot in arm for IT pack

The IT sector, which has the second-highest weightage in the Sensex after the financial sector, has been a key contributor to the 10% gain for the benchmark this year

bse, sensex, bombay stock exchange
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The HDFC Bank counter witnessed volumes of Rs 21 billion in the cash segment

Pavan Burugula Mumbai
The recent plunge in the rupee has taken the fizz out of consumption stocks, which are known to trade at premium valuations.

Some reasons for high valuations, according to analysts, are easy global liquidity, stable currencies, and high earnings growth in local currency terms. However, the recent developments have reversed all these trends, triggering a sharp re-rating in shares of fast moving consumer goods (FMCG) firms.

Between April and August, the BSE FMCG index rose 25 per cent, outperforming the 16 per cent returns by the benchmark Sensex. So far in September, the index has lost more than 6 per