Retail stocks rally in sluggish market

Shares of retail companies rallied onthe bourses on Friday on hopes that the government may soon notify 100 per centFDI (Foreign Direct Investment) in single-brand retail business.

Kishore Biyani-led Future group's Pantaloon Retail (India) surged 6.60 per cent to settle at Rs141.40, while Provogue (India)closed higher by 9.31 per cent at Rs 22.30.

Koutons Retail gained 6.01 per cent, Shopper's Stop ended5.81 per cent higher and Vishal Retail rose by 4.96 per cent.

The rally in these counters was in sharp contrast with thesluggish broader market trend, where the BSE barometer Sensex ended 10.65points higher.

However, shares of Tata group's retail venture Trent Ltdlost 2.22 per cent.

When asked about the notification of 100 per cent FDI insingle-brand retail business, Secretary in the Department of Industrial Policyand Promotion (DIPP) P K Chaudhery today said that it should happen soon.

Chief Economic Adviser Kaushik Basu also said that thegovernment will be able to move ahead with the economic reforms programme,including FDI in (multi-brand) retail, with some tweaking after the Assemblyelections.

"Expectation of FDI in retail led to rise in the retailstocks, bucking the sluggish market trend," Milan Bavishi Research Head InventureGrowth and Securities said.

The decision to increase FDI in single brand retail businesswas taken by the Cabinet on November 24, 2011 along with opening the gates foroverseas investment in the multi-brand retail sector.

However, the government was forced to put on hold FDI inmulti-brand retail due to opposition from several political parties, includingthe UPA ally Trinamool Congress.

 

Presently, 51 per cent FDI is permitted in single brandretail business.