The next few weeks could be very volatile for the markets, and select pivotals which have seen a steep rally could come under selling pressure. A switch to the defensive FMCG and pharma stocks is a bright possibility. More so, when most of these MNCs announce their first half results this month.

Since April 1999, the Sensex has risen by about 33 per cent. Pharma stocks have contributed little to this rally. Rhone Poulenc and Knoll Pharmaceuticals have been the worst performers with their scrips showing a net fall of over 13 per cent. After the initial hype about themerger with Hoechst, Rhone Poulenc has dropped from Rs 1,305 to Rs 1,123 and Knoll from Rs 628 to Rs 547. Indian pharma stocks, barring a few, have followed their MNC peers and have underperformed the market. Wockhardt, Dr Reddy's and Sun Pharma have shown marginal gains. However, Novartis, Smithkline Pharma, Dabur and Ranbaxy have been an exception.

Among FMCG stocks, barring P&G, Reckit & Colman and Colgate, others have failed to move with the wave and have been lying low for sometime now. Colgate has witnessed hectic activity in the past few sessions and has shot up from Rs 210 to Rs 250.

The company's management reshuffle has caught the market's attention.Stocks like Smithkline Beecham Consumer, Cadbury's, Nestle and Burroughs Wellcome could be the right bets in the coming weeks. For instance, Smithkline in spite being the market leader, is consolidating its business, and has relaunched its brown powder, `Boost', which would yield results in the coming times. The company is also expanding the capacityof its largest selling brand `Horlicks'.

This is not the first time that pharmaceutical and fast moving consumer goods stocks have missed the rally. Defensive in nature, the market will turn their attention to these stocks when the Sensex starts dipping. The rally so far has been centred around the cyclicals and commodity sector stocks and these stocks are likely to take a breather.