REUTERS - Indian shares rose 0.6 percent on Wednesday with auto and retail sector shares gaining after the federal government approved a long-awaited pay hike for its employees, while sentiment was also boosted by a global relief rally as the immediate impact of Brexit began to fade.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 1 percent to recoup around one-third of Friday's stinging loss after Britain voted to leave the European Union.
Aiding sentiment globally was data showing the U.S. economy grew at a 1.1 percent annualised rate in the first quarter, rather than the 0.8 percent pace reported last month.
The calmer mood was also reflected in the India Volatility index, which fell about 9 percent on Wednesday after rising 3.37 percent last Friday.
"The falling volatility clearly indicates that there is some comfort in the market, and that the market has gone out from the event risk," said Chandan Taparia, a derivatives and technical analyst with Anand Rathi Securities.
"Even after having such a negative global event, the market managed to hold and digest the negative sentiment, which clearly indicates that the Indian market has the potential to move on the higher side."
The broader NSE Nifty was up 0.59 percent at 8,175.95 as of 0830 GMT, while the benchmark BSE Sensex was 0.58 percent higher at 26,688.83.
Reflecting the optimism, 43 stocks out of the 51 on the Nifty 50 index were higher.
Shares of consumer goods and auto makers rose after the Cabinet approved a rise in salaries and pensions for government employees, according to an official, though details of the hike were not immediately available.
Hero MotoCorp
Retail stocks Shoppers Stop Ltd
Metal stocks also rose, after a government source said the Cabinet cleared a new mineral exploration policy that would allow private companies to carry out standalone exploration for the first time.
Vedanta Ltd
However, some recent outperformers fell, with ITC Ltd
(Reporting by Darshana Sankararaman in Bengaluru; Editing by Subhranshu Sahu)
