Stocks of power sector firms, private sector banks and index heavyweight ITC led the rally on the bourses, with the barometer index, the S&P BSE Sensex, moving past the psychologically important 27,000 level. At 14:15 IST, the Sensex was up 324.84 points or 1.21% at 27,065.23. The Nifty 50 index was currently up 102.65 points or 1.25% at 8,306.65. The Nifty hit its highest level in more than eight months. The Sensex hit its highest level in more than three weeks. A likely boost to consumption demand from increase in salaries and payment of arrears to government employees due to the implementation of the 7th Pay Commission recommendations aided the upmove on the bourses. Gains in Asian markets also aided the upmove on the domestic bourses. Asian stocks edged higher after overnight rally on Wall Street.
The Sensex jumped 328.84 points or 1.22% at the day's high of 27,069.23 in mid-afternoon trade, its highest level since 8 June 2016. The barometer index rose 132.20 points or 0.49% at the day's low of 26,872.59 in early afternoon trade. The Nifty rose 104.05 points or 1.26% at the day's high of 8,308.05 in mid-afternoon trade, its highest level since 26 October 2015. The index rose 39.15 points or 0.47% at the day's low of 8,243.15 in early afternoon trade.
The Union Cabinet yesterday, 29 June 2016, approved the implementation of the recommendations of 7th Central Pay Commission (CPC) on pay and pensionary benefits. The recommendations will benefit over 1 crore employees. This includes over 47 lakh central government employees and 53 lakh pensioners. There will be payment of arrears as the implementation of the 7th Pay Commission recommendations will take effect from 1 January 2016. The arrears of pay and pensionary benefits will be paid during the current financial year (2016-17) itself, unlike in the past when parts of arrears were paid in the subsequent financial year.
In overseas stock markets, bank stocks led losses for European stocks after the US banking units of Deutsche Bank AG and Banco Santander SA failed the US Federal Reserve's annual stress tests. Stocks fell in the UK ahead of a press conference from Bank of England (BOE) Governor Mark Carney later in the day. The FTSE 100 index was currently down 0.35%. Investors want to hear what Carney says about the monetary policy and the UK economy after last week's referendum by the UK to leave the European Union and upheaval.
Most Asian stocks rose as worries subsided about the fallout from the UK's decision to leave the European Union known as Brexit. US stocks surged for the second day in a row yesterday, 29 June 2016, on speculation that the US Federal Reserve will delay interest rate increases in the wake of the Brexit.
Closer home, the market breadth indicating the overall health of the market was strong. On BSE. 1,623 shares rose and 863 shares declined. A total of 205 shares were unchanged. The BSE Mid-Cap index was currently up 1.14%. The BSE Small-Cap index was currently up 1%. Both these indices underperformed the Sensex.
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Pharma stocks edged higher on renewed buying. Dr Reddy's Laboratories (up 2.81%), Wockhardt (up 1.92%), Glenmark Pharmaceuticals (up 1.64%), Aurobindo Pharma (up 1.33%), Cadila Healthcare (up 1.22%), Cipla (up 0.94%), Strides Shasun (up 0.69%), Lupin (up 0.83%), GlaxoSmithkline Pharmaceuticals (up 0.37%), Ipca Laboratories (up 0.16%), Alkem Laboratories (up 0.23%) and Divi's Laboratories (up 0.05%) edged higher. Sun Pharmaceutical Industries (down 0.06%) edged lower.
Power sector stocks were in demand. Jaiprakash Power Ventures (up 5.26%), GMR Infrastructure (up 4.72%), NTPC (up 3.1%), Reliance Infrastructure (up 2.85%), Reliance Power (up 2.09%), CESC (up 1.32%), NHPC (up 0.6%), Power Grid Corporation of India (up 1.22%), Tata Power Company (up 0.55%), JSW Energy (up 0.06%) and Torrent Power (up 0.14%) edged higher. Adani Power (down 0.16%) edged lower.
Engineering & construction major L&T rose 1.03% at Rs 1,497 after the company announced fixing the price band for divestment of a part of its stake in its subsidiary Larsen & Toubro Infotech (L&T Infotech) via initial public offer (IPO). The price band has been fixed at Rs 705 to Rs 710 per share. A discount of Rs 10 per equity share will be offered to retail individual bidders. L&T is selling up to 1.75 crore shares of L&T Infotech via IPO of L&T Infotech. The offer will open for subscription on 11 July 2016 and close on 13 July 2016.
Gayatri Projects rose 1.8% at Rs 633.50 after the company said it has secured a Rs 306 crore contract for the four laning of a highway on the Andhra Pradesh-Tamil Nadu border. The contract is on an engineering, procurement and construction (EPC) basis, which furthers the management's plan to adopt an asset-light model and reinforces the company's position as one of India's top highway builders, Gayatri Projects said. The announcement was made during market hours today, 30 June 2016.
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