Shares of fast-moving consumer goods (FMCG) were trading in the green despite weak market conditions on 9 April after the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) slashed the inflation estimate for fiscal year 2026 from 4.2% to 4.0%. 

Reserve Bank of India, in its statement, said, “CPI inflation for the financial year 2025-26 is projected at 4.0 %, with Q1 at 3.6 %; Q2 at 3.9 %; Q3 at 3.8 %; and Q4 at 4.4 %. The risks are evenly balanced,”

The Reserve Bank of India (RBI) has revised its inflation projections, raising the CPI estimate for Q4FY26 to 4.4%, up from 4.2%. The earlier projections for Q1FY26 and Q2FY26 remained unchanged at 4.5% and 4%, respectively.

In its latest policy decision, the RBI’s Monetary Policy Committee (MPC) unanimously voted to reduce the repo rate by 25 basis points, lowering it from 6.25% to 6%.

Following the announcement, the FMCG index surged by as much as 1.41%, touching an intraday high of 55,066.60. Among individual stocks, Emami led the gains with a 2.67% rise, reaching Rs 597.70, while Nestle followed with a 2.36% increase to Rs 2,329.20.

RBI data revealed that headline CPI inflation dropped significantly between December 2024 and February 2025—from 5.2% to 3.6%, a decline of 1.6 percentage points. This sharp fall was mainly due to a seasonal correction in vegetable prices.

Food inflation also fell to a 21-month low of 3.8% in February, while the fuel segment continued to experience deflation. Core inflation, which was stable in December and January, inched up to 4.1% in February due to a surge in gold prices.

The RBI maintains a positive outlook on food inflation, citing seasonal corrections and improved agricultural conditions. Uncertainty around rabi crop output has eased, with second advance estimates pointing to record wheat production and better pulse yields compared to the previous year. Combined with strong Kharif arrivals, these factors are likely to support continued easing in food prices.

Inflation expectations over the next three months and the next year have dropped significantly, helping to anchor the overall inflation outlook. Additionally, the recent dip in crude oil prices is expected to further ease inflationary pressures.

However, the RBI also cautioned about potential risks from global market volatility and possible weather-related disruptions, which could push inflation higher.

Adding to the positive sentiment in FMCG stocks was a forecast from Skymet predicting a normal southwest monsoon for India despite a slow onset. Rate cuts tend to benefit the FMCG sector as they can boost consumer spending and drive demand for everyday goods.

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