The Sensex on Wednesday rose nearly 267 points to hit a near two-week high of 35,645.40 on fag-end buying, mainly in bank and automobile shares, after the Centre hiked the minimum support price (MSP) for most kharif crops.
The BSE benchmark moved in a narrow range for most part of the day due to weak global cues, amid concerns related to trade tariff spat and macro-economic conditions. However, late buying in some key sector stocks helped the Sensex come out of range-bound trading.
Consistent buying by domestic institutional investors and encouraging services PMI data for June also boosted trading sentiment.
The Centre on Wednesday approved a steep hike in the MSP of 14 kharif crops, which was likely to cost the exchequer over Rs 150 billion.
“After an insipid start, the market gained momentum on account of better auto sales and the government’s announcement of an increase in the MSP. Rural income and spending power will rise due to higher minimum price and progressing monsoon, which may result in higher demand for consumption-oriented stocks,” according to Vinod Nair, research head, Geojit Financial Services.
The Sensex opened on a positive note at 35,385.52 and hit an intra-day high of 35,667.31 before ending at 35,645.40, up 266.80 points, or 0.75 per cent. The index had closed at 35,689.60 on June 22.
The NSE Nifty, after hitting a high of 10,777.15, closed at 10,769.90, up 70 points, or 0.65 per cent. It touched an intra-day low of 10,677.75.
Major players in the paddy space such as Kohinoor Foods rose 12.96 per cent, followed by LT Foods 7.01 per cent and Chaman Lal Setia Exports 2.27 per cent. Most fertiliser stocks also rose, led by Shiva Global Agro Industries (up 9.33 per cent), Coromandel Agro Products(up 4.88 per cent) and Fertilisers and Chemicals Travancore (up 0.77 per cent).