FIIs dump Indian consumer stocks despite tax cut boost

Group 1 - Spending during the festival season from Sept. 22 to Oct. 21 increased by 8.5% compared to the same period last year, driven by a recent tax cut that spurred purchases across various categories including cars, electronics, kitchenware, and sweets [1][2][5] - Foreign investors reduced their holdings in Indian consumer stocks during the three months ending in September, despite the consumption tax cut [5] - Notable reductions in positions were observed in stocks such as Trent Ltd. and BrainBees Solutions Ltd., as reported by Morgan Stanley analysts [5] Group 2 - The sales surge should be approached with caution, as it may be influenced by pent-up demand, according to economists from Nomura Holdings Inc. [3] - Bank of America Corp. analysts indicated that while some headwinds have eased, factors such as slow income growth, a weak labor market, and a fading wealth effect continue to negatively impact sentiment and demand [3][6]