After seeing a higher opening triggered by positive global cues, key benchmark indices hovered in positive zone in morning trade. At 10:15 IST, the barometer index, the S&P BSE Sensex, was up 245.02 points or 0.92% at 26,985.41. The Nifty 50 index was currently up 70.40 points or 0.86% at 8,274.40. World stocks rose as worries over the impact of the Britain's decision to leave the European Union known as Brexit receded.
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 162.40 points or 0.6% at the day's low of 26,902.79 in early 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 49.25 points or 0.6% at the day's low of 8,253.25 in early trade.
In overseas stock markets, Asian stocks edged higher tracking 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 more than three gainers against every loser on BSE. 1,502 shares rose and 402 shares declined. A total of 95 shares were unchanged. The BSE Mid-Cap index was currently up 0.85%, underperforming the Sensex. The BSE Small-Cap index was currently up 1%, outperforming the Sensex.
Auto stocks edged higher for the second day in a row after the Union Cabinet approved the implementation of the recommendations of 7th Central Pay Commission (CPC) on pay and pensionary benefits. TVS Motor Company (up 3.1%), Tata Motors (up 3.09%), Hero MotoCorp (up 1.81%), Bajaj Auto (up 1.68%), Maruti Suzuki India (up 1.05%), Ashok Leyland (up 0.66%), Eicher Motors (up 0.86%) and Mahindra & Mahindra (up 0.73%) edged higher.
Investors are betting that increase in salaries and payment of arrears to government employees due to the implementation of the 7th Pay Commission recommendations will boost consumer spending and lift demand for two-wheelers and passenger vehicles. The recommendations will benefit over 1 crore employees. This includes over 47 lakh central government employees and 53 lakh pensioners. 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.
Realty shares also extended gains registered during the previous trading session triggered by expectations that demand for new homes will rise as a result of the increase in salaries and payment of arrears to government employees due to the implementation of the 7th Pay Commission recommendations. Housing Development and Infrastructure (up 1.96%), D B Realty (up 2.06%), Sobha (up 2%), Indiabulls Real Estate (up 1.46%), Unitech (up 1.27%), Oberoi Realty (up 0.72%), DLF (up 0.63%), Prestige Estates Projects (up 0.92%) and Godrej Properties (up 2.35%) edged higher.
Coal India rose 0.53% at Rs 313.10 after the company announced signing two agreements with Solar Energy Corporation of India for implementation of solar power project in Madhya Pradesh. Coal India and Solar Energy Corporation of India (SECI) signed two agreements yesterday, 28 June 2016, for implementation of 200 megawatts (MW) solar power projects in Madhya Pradesh for the beneficial utilisation of solar power by Northern Coalfields (NCL) and South Eastern Coalfields (SECL) at an estimated cost of Rs 650 crore. NCL and SECL are subsidiaries of Coal India. The announcement was made after market hours yesterday, 29 June 2016.
Minda Industries rose 1.48% at Rs 1,190 after the company's board of directors approved a 2-for-1 stock-split. The announcement was made after market hours yesterday, 29 June 2016.
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