Retail stocks surge on FDI move

Cheering the government's decision to liberalise foreign investment norms for the high-growth retail sector, investors on Friday rushed to buy shares of listed retailers and pushed higher the prices even in a weak market.

Stocks of companies like Pantaloon Retail, Trent Ltd, Vishal Retail, Koutons Retail, Shopper's Stop and Provogue rose by as much as 20 per cent, outperforming a broad-based downtrend on the bourses.

The benchmark indices Sensex and Nifty dropped by more than one per cent each, while sectoral indices for the IT, metal, energy, auto and FMCG sectors also ended in the red.

Bucking the downward trend , the retail stocks opened on a strong note this morning and mostly maintained their upward momentum throughout the trading session.

The surge in retail stocks followed a government decision last evening to allow 51 per cent FDI (Foreign Direct Investment) in the multi-brand or supermarket retail business, and to do away with the present 51 per cent cap for FDI in the single-brand retail business.

The decision would allow global supermarket chains to enter the country through arrangements with minority Indian partners and permit the single-brand retailers to set shop here entirely on their own. The move would help Indian retailers get the much-needed funds for business expansion.

Kishore Biyani-led Future group's Pantaloon Retail (India) Ltd saw its share price zooming by 17 per cent to Rs 234.05. Earlier in the day, the stock hit a monthly high of Rs 238.60.

Shares of Tata group's retail venture Trent Ltd also surged by 8.4 per cent to close at Rs 1058.45, after scaling a one-week high of Rs 1092 a piece.