Retail stocks rally on FDI buzz

Retail stocks, led by Shoppers' Stop, rose by up to 10.52 per cent on the BSE on Friday amid a media report that the government will allow 51 per cent foreign direct investment in the multi-brand retail sector.

Shares of Shoppers' Stop zoomed by 10.52 per cent to touch an all-time high of Rs 440.90 in the intra-day trade.

Later, the stock closed at Rs 433.30, up 8.62 per cent from the previous close.

Pantaloon Retail India settled higher by 6.87 per cent at Rs 285.30, while Trent jumped by 4.98 per cent to close at Rs 1,109.55.

Buying was also seen at the counters of Koutons Retail India and Vishal Retail, with the former gaining 1.72 per cent and the latter 0.45 per cent.

According to a media report, the government will move to open up the multi-brand retail sector and allow foreign direct investment of up to 51 per cent, with at least half of the funds invested in infrastructure such as cold storage.

The report also added that the commerce and industry ministry has floated a proposal to open the retail sector by 51 per cent.

However, the report later quoted the government as saying that it has not taken a final view on allowing FDI in multi-brand retail.

At present, FDI is not allowed in the multi-brand retail sector. However, 51 per cent FDI is allowed in single-brand retail and 100 per cent in wholesale cash-and-carry operations.