FMCG stocks rally up to 4% after IMD predicts monsoon onset in two days

Shares of Indian consumer goods companies surged on Wednesday after a favourable monsoon forecast from the Indian meteorological department (IMD). The Nifty FMCG index rose 0.93% in afternoon trade led by UBL and Britannia with Tata Consumer Products and Nestle also making significant gains. Rural demand, which has been muted for a few quarters, is critical for FMCG companies and a positive monsoon is essential for its revival. HDFC Securities expects a normalisation of volume and value growth with an expected rebound for rural demand.