Second weekly gains for market: FMCG stocks register gains on GST Council decision

Sensex and Nifty recorded their second straight weekly gains by rising 276.77 points, or 0.91 per cent, and 27 points, or 0.28 per cent, respectively.

By: ENS Economic Bureau | Mumbai | Published:May 20, 2017 3:52 am
bse, bse sensex, fmcg, gst, gst rates, Sensex, Nifty, Sensex points, BSE Sensex, Nifty close, Sensex at close, Markets, Market news, Indian Express Sensex and Nifty recorded their second straight weekly gains by rising 276.77 points, or 0.91 per cent, and 27 points, or 0.28 per cent, respectively.

While global volatility arising out of political developments in the US and emerging markets held back the gains on stock markets, FMCG stocks were in the limelight as products such as hair oil, soaps and toothpaste will cost less from July 1 when GST is set to be implemented.

Colgate Palmolive gained 3.59 per cent, Tata Coffee rose by 3.07 per cent, ITC (2.82 per cent), Emami (2.46 per cent), HUL (2.04 per cent), Tata Global Beverages (1.46 per cent) and Marico (1.32 per cent) on BSE. The FMCG index ended 1.86 per cent higher at 9,627.43.

The BSE Sensex resumed higher and hit its all-time high of 30,712.35 (intra-day), the fourth in five sessions, but later eased to a low of 30,338.52 before settling 30.13 points, or 0.10 per cent higher at 30,464.92. The broader 50-share NSE Nifty touched a high of 9,505.75 at the outset, but succumbed to profit-booking and settled 1.55 points, or 0.02 per cent, down at 9,427.90.

Sensex and Nifty recorded their second straight weekly gains by rising 276.77 points, or 0.91 per cent, and 27 points, or 0.28 per cent, respectively.

Nitasha Shankar, Sr. Vice President and Head of Research, YES Securities India, said, “broader markets continued to underperform the headline Indices as profit booking deepened. Midcap Index and Small Cap Index ended lower by 0.60 per cent and 0.78 per cent respectively. FMCG Index surged in trade providing support to the markets. IT, media and auto indices came under selling pressure ending in the red.”

“The market traded between gains and losses due to concern over US political chaos and sharp fall in Brazil which is a key part of EMs. Some confusion was seen in the market regarding the likely GST rate, especially for consumer discretionary… but later it was understood that the broad effective rate will be neutral to the economy while consumer staples and FMCG will see some benefits,” said Vinod Nair, Head of Research, Geojit Financial Services.

GST Council decided that commonly used products like hair oil, soaps and toothpaste will be charged with a single national sales tax or GST of 18 per cent. These items at present attract 22-24 per cent tax incidence through a combination of central and state government levies.

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