Shares of retail, aviation and television distribution companies surged on Monday following the green signal given by the government on foreign direct investment (FDI) in these sectors on Friday.
Pantaloon Retail closed 19.0% up at Rs. 188 at the Bombay Stock Exchange (BSE) after touching an intra-day high of Rs. 209.
Shoppers Stop surged 6.4% at the BSE to close at Rs. 383, while touching a high of Rs. 415 during the intra-day movement.
The Centre has approved FDI up to 51% in multi-brand retail with the onus falling on states to give the final approval.With nine states and three Union territories showing interest for opening up retail to FDI, stocks of Pantaloon and Shoppers Stop showed positive momentum as these retailers have more than 50% of their stores in these states.
On the aviation front, Kingfisher Airlines surged 20.0% to close at Rs. 13, while SpiceJet moved up 12.0% to close at Rs. 39 at the BSE.
The government has approved the proposal to allow foreign airlines to buy up to 49% in local airline companies.
Removing the existing restriction on investment by foreign airlines would help airline firms bring in strategic investors into the aviation sector which was limited to non-airline investors.
"The government has been able to communicate its intent to bring in reforms. While there will be no big investment immediately it's the policy that is bringing in the surge," said Mohit Bahl, partner, KPMG India.
"Most of the Indian airlines are in dire need of capital to reduce their huge accumulated losses and mounting debt levels, caused largely by competition induced price wars and rising fuel and capital costs," said Sachin Gupta, analyst, Edelweiss.
"The airline stocks moved as it's a highly positive move taken by the government and raises hopes of further reforms in the aviation sector."
The FDI limit in digitisation has been hiked to 74% from 49% for cable and DTH operators. Stocks of DishTV and Den Net-work surged 3.0% each in the day.