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Journalism of Courage
Defying a rally in the stock market,shares of retail companies today tumbled on the bourses,amid a stiff political opposition to the government’s decision for opening up the sector for foreign investors.
The political storm over FDI in retail gathered momentum today and paralysed the proceedings in Parliament for the second day amid vociferous demands for withdrawal of the government’s decision in this regard.
Amid this political opposition,stocks of companies like Pantaloon Retail,Trent Ltd,Vishal Retail,Koutons Retail,Shopper’s Stop and Provogue fell by as much as 10 per cent and sharply under-performed a broad-based uptrend on the bourses.
The benchmark indices Sensex and Nifty surged by 3 per cent each.
The retail stocks had recorded smart gains on Friday following a government decision 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.
But,with intensifying political opposition,investors abandoned the retail shares in an overall strong market.
Vishal Retail fell the most,shedding 9.96 per cent to close at Rs 20.35 on the BSE,while Koutons Retail plunged 7.74 per cent to settle at Rs 22.05.
Kishore Biyani-led Future group’s Pantaloon Retail (India) Ltd saw its shares plummeting by 4.57 per cent to Rs 223.35.
Shares of Tata group’s retail venture Trent Ltd also lost 3.19 per cent,while the shares of Shopper’s Stop ended 7.15 per cent lower and Provogue (India) closed down by 4.41 per cent.
“Retail stocks closed down with substantial losses as political opposition against FDI in retail segment intensified,” Bonanza Portfolio Senior Research Analyst Shanu Goel said.
With the opposition from various political parties gathering momentum,Prime Minister Manmohan Singh today held consultations with Congress President Sonia Gandhi and may hold an all-party meeting tomorrow to resolve the deadlock.
