Pay panel proposals cheer markets; Sensex up 196 points

Prospects of growth in consumption-led demand, after a key panel recommended major salary and pension hike for central government employees, buoyed Indian equity markets during the late-afternoon trade session on Friday.

The barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) rose 196 points or 0.76 percent, a day after the 7th Pay commission recommended a 16 percent hike in salary and 24 percent raise in pension for central government employees.

Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) made healthy gains during the late-afternoon session. It was higher by 61.40 points or 0.78 percent at 7,904.15 points.

The S&P BSE Sensex, which opened at 25,856.13 points, was trading at 26,037.59 points (2.30 p.m.), up 195.67 points or 0.76 percent from the previous day's close at 25,841.92 points.

The Sensex so far has touched a high of 26,058.76 points and a low of 25,769.81 points during the intra-day trade.

Vaibhav Agarwal, vice president and research head at Angel Broking, told IANS that the Indian markets are trading higher after opening flat in early trade.

"The bullishness is visible in the broader markets with the mid and small cap indices posting strong gains," Agarwal said.

"The government's clarification that the hike announced in the 7th Pay Commission will not impact the fiscal deficit target helped investor sentiment," he added.