Impact of Lockdown in the FMCG sector of the Indian Stock Market – Analysis using Statistical Methods

Article History:Received:11 January 2021; Accepted: 27 February 2021; Published online: 5 April 2021 Abstract: The Covid19 outbreak has shattered the Global economy and Indian economy too had got no exemption from it. Despite the GDP of India moving in the negative trend, very few sectors like Pharmaceutical and FMCG have shown some positive signs because of this pandemic and the lockdown followed by it. Consumer staples will always remain essential irrespective of the economical movement. In particular, during the tougher times, whenever there arises an unprecedented scenario, the humankind will always try to safeguard itself and in turn that will certainly cause a high demand in the FMCG sector. In this paper, we will be analysing the impact of lockdown in the movement of the FMCG sector using some of the Statistical tools.


Introduction
A Stock exchange otherwise called as the Securities exchange refers to an exchange in which the shares of stocks of the listed companies are bought and sold by the traders and investors. There are two stock exchanges in India, namely the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). Thousands of companies are listed under these exchanges and each of which is placed under a specified sector. There are around 11 stock sectors, the movement of which are highly responsible for the economic status of any country. The Fast Moving Consumer Goods (FMCG) or the Consumer Packaged Goods (CPG) is one among those sectors which currently holds the 4 th place in the Indian Economy.
The FMCG industry takes the role of producing, distributing and marketing the consumer goods that are in the rapid consumption on a daily basis. The unprecedented scenario in our day-to-day life in turn leaves a huge impact over the growth/decline of this sector. The Covid-19 invasion in India has also affected the economical standing of the FMCG sector in a larger extent. Thus, in this paper, we intend to statistically analyse the impact of the pandemic and the lockdown forced by it, on the movement of the FMCG sector. We further make a comparative study between the NSE index, NIFTY-FMCG index and in particular, the close prices of the stocks of the Britannia Industries, which serves as one of the leading front-liners in this sector.

Preliminaries
In this section, we shall mention the basic terminologies which are commonly used in the analysis of stock market.

Stock Market
The Stock Market is a central and a broader marketing platform wherein the buying and selling of the shares issued by the public listed companies take place on a regular basis.

Stock
A Stock generally refers to a kind of security that represents the ownership of a particular company or a corporation that may be issued in the marketplace. It is also known as Equity.

Share
The Shares are simply the units of a stock which are fluctuating in nature, depending on the market value of the stock.

Share Holder
A Share Holder or a Stock Holder is an individual or an institution who/which owns one or more shares of a public or a private company.

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A Dividend is a share of profits or rewards that a company pays to its shareholders. It is merely decided by the company's board of directors and it may be issued in the form of cash, stock or payment. The company's net profit is the source of dividends.

National Stock Exchange (NSE)
National Stock Exchange of India Limited which is located in Mumbai, was established in the year 1992 as the first electronic exchange in India. It is now the leading stock exchange of the country, offering trade and investment in the equity, derivatives and the debt markets.

National Index Fifty 50 (NIFTY 50)
NIFTY is the blend word of 'National' and 'Fifty', meaning that it consists of 50 active stocks and it is the equity benchmark index of the NSE.

Bombay Stock Exchange (BSE)
Bombay Stock Exchange was established in the year 1875 in Mumbai and it is the Asia's first stock exchange. It provides the fastest stock exchange in the world and it offers trade in equity, currencies, debts, derivatives and mutual funds.

Sensex
Sensex or the Sensitive Index is the stock-market index of the top 30 active trading stocks of the companies listed on the Bombay Stock Exchange.

Open Price:
The price at which the market opens for trading on a market day is said to be the open price.

Close Price:
The Last Traded Price (LTP) during the closing time of the market is known as the close price of the day. [1] Simple Moving Average (SMA) is formed by computing the average price of a security over a specific number of periods. Most moving averages are based on the closing prices. SMA provides resistance and support. It indicates signals to sell or buy and it make easier to view the price trend of a security. SMA = ∑ where ∑ = Period sum, n = number of days.

Exponential
Moving Average (EMA) [1] An Exponential Moving Average is similar to SMA. EMA evaluates the trend direction over a period of time. EMA is the best indicator for investors who deal with intraday and fast moving markets. EMA gives a higher weight to recent prices, while SMA assigns equal weight to all values. EMA can be calculated for 12 days, 26 days and so on. 2.14. Moving Average Convergence Divergence (MACD) [1] The Moving Average Convergence Divergence [MACD] is an indicator in Technical analysis used to identify a new trend such as a bullish (or) bearish flux. MACD is all about convergence and divergence of the two moving averages.

MACD = (12 day EMA -26 day EMA)
Positive MACD indicates that the 12 day EMA is above the 26 day EMA. Here shorter EMA diverges from the longer EMA. This means upside momentum is increasing.

EMA
Negative MACD indicates that the 12 day EMA is below the 26 day EMA. Here shorter EMA diverges below the longer EMA. This means downside momentum is increasing. [1] The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements. It oscillates between 0 and 100.

Relative Strength (RS) =
RSI is used to identify oversold and overbought price areas. If RSI is above 50, then it is considered as bullish behaviour and if its value is below 50, then it is considered as bearish in nature.