After trimming gains in early afternoon trade, key benchmark indices recovered in afternoon trade. At 13:17 IST, the barometer index, the S&P BSE Sensex, was up 204.47 points or 0.76% at 26,944.86. The Nifty 50 index was currently up 58.50 points or 0.71% at 8,262.50. 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 253.95 points or 0.94% at the day's high of 26,994.34 in morning trade, its highest level since 23 June 2016. The barometer index rose 132.21 points or 0.49% at the day's low of 26,872.60 in early afternoon trade. The Nifty rose 73.20 points or 0.89% at the day's high of 8,277.20 in morning trade, its highest level since 23 June 2016. 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. In the UK, the FTSE 100 index was currently down 0.39%. 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. 1,557 shares rose and 878 shares declined. A total of 193 shares were unchanged. The BSE Mid-Cap index was currently up 0.88%. The BSE Small-Cap index was currently up 0.9%. Both these indices outperformed the Sensex.
Most capital goods shares edged higher. Reliance Defence and Engineering (up 5.43%), Bharat Heavy Electricals (up 3.28%), Crompton Greaves (up 2.23%), ABB India (up 1.16%), SKF India (up 1.01%), Alstom T&D India (up 0.90%), ALSTOM India (up 0.88%), BEML (up 0.83%), Punj Lloyd (up 0.79%), Lakshmi Machine Works (up 0.71%), Thermax (up 0.71%), Siemens (up 0.61%), Suzlon Energy (up 0.58%) and AIA Engineering (up 0.27%), edged higher. Havells India (down 0.15%), Bharat Electronics (down 0.16%), Praj Industries (down 0.24%) and Jindal Saw (down 0.56%), edged lower.
Engineering & construction major L&T rose 0.49% to Rs 1,489. The stock hit a high of Rs 1,503.95 and a low of Rs 1,484.75 so far during the day.
Most FMCG shares rose. GlaxoSmithKline Consumer Healthcare (up 1.21%), Godrej Consumer Products (up 1.14%), Hindustan Unilever (up 1.14%), Colgate Palmolive (India) (up 0.91%), Procter & Gamble Hygiene & Health Care (up 0.88%), Nestle India (up 0.79%), Marico (up 0.75%), Jyothy Laboratories (up 0.58%), Dabur India (up 0.21%) and Tata Global Beverages (up 0.19%), edged higher. Bajaj Corp (down 0.3%) and Britannia Industries (down 1.05%), edged lower.
Alembic Pharmaceuticals jumped 5.68% after the company announced that it did not receive any Form 483 observations from United States Food & Drug Administration (USFDA) for the company's two active pharmaceutical ingredient units located at Panelav, Gujarat and that the units were successfully inspected by the USFDA between 20 June 2016 and 29 June 2016. A FDA Form 483 is issued to a firm at the conclusion of an inspection when an investigator has observed any conditions that in its judgement may constitute violations of the Food Drug and Cosmetic (FD&C) Act and related Acts.
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