Shoppers Stop Ltd. (SHOP) rose to the highest in more than a year, leading gains among retailers after India’s lower house of parliament voted to endorse a government decision to allow foreign investment in supermarkets.
Shoppers Stop climbed 1 percent to 469.55 rupees, the highest since July 2011, after rising as much as 6.9 percent. Pantaloon Retail India Ltd. (PF), the nation’s largest retailer, gained 0.7 percent to 239.30 rupees, the highest close since September 2011, while Trent Ltd. (TRENT) declined 0.3 percent after gaining earlier in the day.
Yesterday’s parliamentary vote backs a September decision by India’s government to allow overseas retailers such as Wal- Mart Stores Inc. and Tesco Plc (TSCO) to own as much as 51 percent of stores selling more than a single brand. Indian retail companies stand to gain from the government’s decision as it would encourage partnerships with international businesses, and may bring in funding and technology.
Two hundred and fifty-three members of the 545-member lower house yesterday supported the government’s plan, while 218 members voted against the decision. Two regional parties that oppose the move chose to walk out of the session rather than vote with ideological rivals.
The government’s decision does not require parliamentary approval to become law. The government agreed to a vote to end protests that had stalled legislative business.
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