Retail stocks slump on FDI uncertainty

Shares of retail companies on Monday plummeted by up to 13 per cent on bourses amid continuing uncertainty over permitting FDI in the multi-brand.

Kishore Biyani-led Future group's Pantaloon Retail (India) tumbled 12.86 per cent to Rs 186.40 on the BSE, while Vishal Retail lost 6.20 per cent to close the day at Rs 18.90.

Other retail companies, too, received a similar drubbing.

Provogue (India) fell by 4.18 per cent, Koutons Retail lost 6.49 per cent and Tata Group's retail venture Trent shed 3.28 per cent.

The benchmark index Sensex ended 41.50 points lower at 16,805.33.

Analysts said uncertainty over permitting FDI in the multi-brand retail sector is worrying investors who chose to book profits in these stocks in a sluggish market.

"Retail stocks witnessed selling pressure after tussle between UPA and other parties over approval to FDI in retail sector," Bonanza Portfolio Senior Research Analyst Shanu Goel said.

These stocks had recorded smart gains on November 25 a day after Cabinet decided to allow 51 per cent FDI (Foreign Direct Investment) in the multi-brand or supermarket retail business and allow 100 per cent FDI in the single-brand retail business.

However, the decision was met with strong resistance from the Opposition, as well as UPA allies Trinamool Congress and DMK.

The Parliament has been paralysed since the beginning of the Winter Session on November 22 over many issues, including allowing FDI in single retail.