Retail stocks witnessed an immediate rise in price around 12.30 p.m on Tuesday, after the DMK, the Government’s main ally, said it will support the Government in case there is voting in Parliament on allowing foreign direct investment in retail.
While most of the retail stocks retained the gains and even rose further, a few such as Trent and Shoppers Shop, failed to sustain and closed the day in the red.
V2 Retail was the biggest gainer, by surging 10 per cent.
The DMK’s decision also had a positive impact on the broader market. The Nifty and the Sensex gained in excess of 1.6 per cent. The Nifty closed at 5,727, up 92 points and the Sensex closed at 18,842, up 305 points.
This positive sentiment was further strengthened by reiteration of a stable outlook for India by rating agency Moody’s and Euro Zone’s nod to Greece’s bailout.
“Adding to the positive bias, domestically, the DMK decided to support the UPA Government in Parliament on FDI in retail sector. This comes as a huge relief to the Manmohan Singh Government,” said Amar Ambani, Head – Research, IIFL.
Traders said that further direction would depend on Thursday’s expiry in F&O segment. “The next few days will be very important from the reforms perspective. Markets will focus on developments on the ‘fiscal cliff’ issue in US, IIP/inflation data and on the rate decision from the RBI,” said Dipen Shah, Head-PCG research, Kotak Securities.
FIIs bought equity worth Rs 1,083 crore in the net while DIIs offloaded equity worth Rs 209 crore. Retail investors on the BSE also sold equity in the net to the tune of Rs 364 crore.