The share prices of companies driven by rural consumption rose on Wednesday after the Union Cabinet approved a new umbrella scheme to ensure remunerative prices to the farmers for their produce. The stock of Hindustan Unilever (HUL) rose by 2.29% and ended Wednesday’s session at Rs 1,627.95. The share prices of ITC rose by 3.11%, Godrej Consumer Products by 3.65%, Dabur by 2.22% and Bajaj Auto by 1.42%.
The BSE Fast Moving Consumer Goods index rose by 2.40% and ended the session at 11997.64. Market Participants said the new scheme could help the rural consumer to earn some extra income. “Higher minimum support price means higher rural income which will translate to more revenues for these companies,” said AK Prabhakar, head of research at IDBI Capital.
However, market participants had some reservations when asked about the outlook of these stocks. The new umbrella scheme named Pradhan Mantri Annadata Aay SanraksHan Abhiyan (PM-AASHA) involves measures including direct procurement from farmers, paying them for losses incurred when wholesale market prices are lower than announced MSPs and procurement by private traders at MSP on a pilot basis.