As Britannia shares surge, Nifty FMCG index hit all-time high for third consecutive session; here's why

The Nifty FMCG index hit a new record high of 49,825 in intraday trade, and the BSE FMCG index also hit a record high. In the same sector, historical data suggests that FMCG stocks outperform the broader market during correction phases and Piyush Chaudhry recommended three FMCG stocks for trading

Commenting on Nifty scaling a new lifetime high, Santosh Meena, Head of Research, Swastika Investmart, said that the 50-stock index surged to an unprecedented all-time high on account of solid fundamentals of the Indian economy and the consistent stability in global cues witnessed recently.

As broader market indices like sensex and nifty continue to form new highs. Some stocks have witnessed consistent improvement in their scores. The selected stocks depict a strong upward trajectory in their overall average score which is based on five key pillars i.e. earnings, fundamentals, relative valuation, risk and price momentum. This implies that there has been a significant improvement in their market outlook in the given time frame.

Asian stocks rose as trading resumed in most of the regions markets following a holiday on Monday. Investors are weighing JPMorgan Chase & Co.s purchase of First Republic Bank along with expectations the Federal Reserve will hike interest rates once again this week. MSCI Inc.s Asia Pacific Index climbed 0.3%, supported by shares in Hong Kong that gained at the open.

The fall was sharper in the Nifty Midcap and Nifty Smallcap indices - each of them tumbled around 2%. FMCG was the only sectoral index trading in the green, while banks and IT indices were trading around 0.5% lower. The fall was sharper in auto, media, metal, PSU banks, and realty stocks. In percentage terms, today's decline in Nifty was the biggest single-day loss since October 26. In the last one month alone, the index is up over 1,500 points or about 7.6%.

​​Analysts recommend stocks like Reliance, HCLTech, Maruti, Larsen & Toubro, Bharti Airtel, Bajaj Finserv, Tata Motors, Bank of Baroda, Ramco Cements, PVR, and Idea Forge for trading.

“While the majority of stocks trading above their 200-DMAs is a good sign, it also reflects the market breadth hovering in the overbought territory. This, however, does not show individual stocks are in an overbought zone, as that will be reflected by momentum indicators like RSI and MACD,” Gaurav Bissa of InCred Equities said.

Analysts said gains in the stock market have been restricted in the past when 70% of the stocks on the NSE 500 index trade above the 200-DMA.

The Nifty index closed marginally higher at 19,398.50, while the S&P BSE Sensex slipped slightly to 65,446.04. The broader market outperformed the larger peers.

The Nifty surged 1.97% to a record high of 22126.80, briefly surpassing its previous record of 22124.15 on 16 January, before closing up 0.72% at 21853.80