Benchmark indices trade off intraday high

Key benchmark indices trimmed gains in early afternoon trade. At 12:15 IST, the barometer index, the S&P BSE Sensex, was up 164.29 points or 0.61% at 26,904.68. The Nifty 50 index was currently up 47.95 points or 0.58% at 8,251.95. 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 global stocks also aided the upmove on the domestic bourses. World stocks rose as worries over the impact of the Britain's decision to leave the European Union known as Brexit receded.

The Sensex rose 132.21 points or 0.49% at the day's low of 26,872.60 in early afternoon trade. The barometer index 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 Nifty rose 39.15 points or 0.47% at the day's low of 8,243.15 in early afternoon trade. The index 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 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, Asian stocks edged higher after overnight rally on Wall Street. 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 broad market depicted strength. There were nearly two gainers against every loser on BSE. 1,527 shares rose and 773 shares declined. A total of 170 shares were unchanged. The BSE Mid-Cap index was currently up 0.71%. The BSE Small-Cap index was currently up 0.86%. Both these indices outperformed the Sensex.

Bank stocks edged higher on renewed buying. Among public sector banks, IDBI Bank (up 1.3%), State Bank of India (up 1.36%), Bank of India (up 1.1%), Canara Bank (up 0.62%), Punjab National Bank (up 0.72%) and Bank of Baroda (up 0.32%) edged higher. Indian Bank (down 0.04%) and Corporation Bank (down 1.33%) edged lower.

Among private sector banks, Axis Bank (up 2.34%), ICICI Bank (up 1.73%), Kotak Mahindra Bank (up 0.89%), Yes Bank (up 0.35%) and IndusInd Bank (up 0.19%) edged higher.

Index heavyweight HDFC Bank was down 0.24% at Rs 1,165. The stock hit a high of Rs 1,174 and a low of Rs 1,164.80 so far during the day.

Cement stocks rose. Shree Cement (up 1.09%), UltraTech Cement (up 0.46%) and ACC (up 0.07%) edged higher. Ambuja Cements (down 0.65%) edged lower.

Grasim Industries was up 2.59%. Grasim has exposure to cement sector through its holding in UltraTech Cement.

LT Foods rose 4.93% at Rs 251 after the company's announcement that it has incorporated a subsidiary named as LT Foods International in United Kingdom for strengthening its presence in Europe. The company added that it is evaluating the option to set up a facility in Europe to more effectively service customers in International markets. The announcement was made after market hours yesterday, 29 June 2016.

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