Shares in Indian retailers fell on media reports that government coalition members Samajwadi Party and leftist parties have opposed allowing foreign direct investment into multi-brand retail outlets.
Leaders from these parties have written to Prime Minister Manmohan Singh expressing their opposition, newspapers including the Times of India report on Monday.
Shares in Pantaloon Retail fell 5.2 percent. India's top retailer had surged 26.4 percent since the end of May to Friday's close, far outperforming Nifty's 6.5 percent gain, on hopes the government would open up the retail sector.
Shoppers Stop, which operates the Hypercity retail chain, lost 4.1 percent after gaining 19.9 percent during the same period.
India last year scrapped plans to allow up to 51 percent foreign ownership of multi-brand retail because of political opposition.
Investors had seen retail FDI as one of the key reform measures being considered by the government after the presidential elections.