Growing uncertainty over the future of the government's bold step to allow foreign direct investment (FDI) in multi-brand retail took its toll in the stock market on Monday as retail stocks were hammered by anxious investors and sceptical speculators.
But for Shoppers Stop, which recovered to end with gains, up by 2.71% at R371, listed retail stocks slipped down, with Kishore Biyani-led Pantaloons Retail that owns the Big Bazaar chain of retail stores -- and possibly the hottest stock as an established player in multi-brand retail -- falling 12.86% to close at Rs 186.4.
The fall in retail stocks was in marked contrast to the Sensex, which held steady, falling by only 0.25% to end the day at 16,805 points.
Sunil Jain, vice-president, equity research, Nirmal Bang Securities, said the Shoppers Stop stock bucked the downward trend as it had not seen any sharp rise when other retail stocks surged after the government’s decision.
“Shoppers Stop remained firm today because the company made it clear that it was not aggressive on attracting foreign capital when FDI in retail was announced and so was unaffected,” said Jain. The company offered no immediate comment.
The government’s decision to put the FDI decision on the backburner came in the face of sustained protests that FDI in retail will hurt small grocers and shopkeepers."The industry is quite shocked with this sudden reforms paralysis but while it may have been held back, we are optimistic it will go through soon," said Dinesh Malpani, CEO, V2 Retail, an offshoot of Vishal Retail.