Stock market crash: FMCG index recoups 3% from intraday lows as investors rush for defensive stocks

Indian markets open nearly 5% lower on Monday in the aftermath of tariff announcements. The NIFTY50 index opened 1,156 points lower at 21,758, breaking below the swing low levels touched in March 2025. The volatility gauge index, India Vix, jumped more than 50% on a single day, which is also the sharpest single-day increase in decades.

The sharp cuts in the index were largely driven by IT stocks, which were the top losers and top index movers as well. The NIFTY IT index slumped 7.4% at market opening and is currently traded at 5.7% lower at 9:30 am.

Similarly, NIFTY Metal, Media, IT & Telecom, Realty, Auto, and Oil & Gas are all trading more than 5% lower on Monday morning in response to the global market turmoil led by trade wars.

NIFTY FMCG outperforms its peers

Despite the broader weakness in the market, FMCG stocks recouped the majority of the opening losses within the first 15 minutes of the trade. The FMCG index opened 4.4% lower at 51,201 on Monday morning in line with the other sectoral indices. However, the index recouped the majority of the losses and currently trading 1.9% lower at 52,849 at 9:40 am.

Why is the FMCG index outperforming?

There are two main reasons for the outperformance of FMCG stocks. First, in a crisis period like this, consumer-oriented stocks always perform better as investors pile to add defensive names like ITC, Britannia, Hindustan Unilever and more. Second, they are focused on domestic business activities and have little reliance on exports, thereby insuring them against the impact of external shocks like tariffs and sanctions. Third, FMCG stocks trade at a 20% discount to their peak valuations touched in September 2024. The NIFTY FMCG price-to-earnings ratio stood at 42x compared to 52.3x in September 2024. Lastly, lower valuations, defensive appeal and strong fundamentals with equally strong dividend yield makes them a better choice for a stormy day like today.