Stocks gain on 7th Pay Commission hike, global rally
Market edged higher last week after the Union Cabinet approved a long-awaited pay hike for its employees. The sentiment was also boosted by a global relief rally as the immediate impact of Brexit began to fade. With the Futures & Options (F&O) expiry on Thursday, 30 June 2016, the market witnessed higher volatility.
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. The Union Cabinet on Wednesday, 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.
Gains in global markets also aided the upmove on the domestic bourses. World stocks rose as worries subsided about the fallout from the UK's decision to leave the European Union known as Brexit. The UK voted to leave the European Union (EU) in a referendum on 23 June 2016. The unexpected referendum result sent shock waves through the UK parliament, leaving the two biggest political parties in turmoil.
Back home, the barometer index, the S&P BSE Sensex, rose 747.20 points or 2.83% to settle at 27,144.91. The Nifty 50 index rose 239.75 points or 2.96% to settle at 8,328.35.
The BSE Mid-Cap index rose 4.81%. The BSE Small-Cap index rose 5.38%.
Trading for the week started on a subdued note. Amid a divergent trend among various index constituents, the two key benchmark indices settled near the flat line on Monday, 27 June 2016. The barometer index, the S&P BSE Sensex, rose 5.25 points or 0.02% to settle at 26,402.96. The Nifty 50 rose 6.10 points or 0.08% to settle at 8,094.70. Volatility was high throughout the session. IT stocks extended losses registered during the previous trading session triggered by the UK voting to leave in the European Union in a historic referendum on 23 June 2016.
A recovery in European stocks and gains in US index futures aided the upmove on the domestic bourses on Tuesday, 28 June 2016. The barometer index, the S&P BSE Sensex, rose 121.59 points or 0.46% to settle at 26,524.55. The Nifty 50 index rose 33.15 points or 0.41% to settle at 8,127.85. The Sensex and the Nifty edged higher for the second straight trading session. Italian banks led gains in European stocks after reports that the Italian government is looking at adding €40 billion ($44 billion) to protect the country's financial system in the wake of the UK's vote to leave the European Union last week.
A recovery in global stocks from losses triggered by last week's unexpected outcome of the UK referendum for the country to leave the European Union (EU) aided gains on the domestic bourses on Wednesday, 29 June 2016. The barometer index, the S&P BSE Sensex, rose 215.84 points or 0.81% to settle at 26,740.39. The gains for the Nifty 50 index were higher than those for the Sensex in percentage terms. The Nifty 50 index rose 76.15 points or 0.94% to settle at 8,204. With third straight day of gains, the Sensex and the Nifty, both, attained their highest closing level in almost a week. World stocks rose on speculation that central banks in the UK, Japan and the European Central Bank may boost monetary stimulus to counter a potential drag on the global economy from the UK's vote to leave the European Union known as Brexit. With the lone exception of the BSE FMCG index, all the other sectoral indices on BSE ended in positive zone.
Stocks of power sector firms, telecom companies and private sector banks led gains for the two key benchmark indices on Thursday, 30 June 2016. The barometer index, the S&P BSE Sensex, rose 259.33 points or 0.97% to settle at 26,999.72. The Nifty 50 index rose 83.75 points or 1.02% to settle at 8,287.75. After opening with an upward gap, the two key benchmarks hovered in positive territory throughout the trading session. The Sensex settled a tad below the psychologically important 27,000 level after surpassing that mark in intraday trade. The Sensex and the Nifty edged higher for the fourth straight trading session. The Sensex attained one-week closing high. The Nifty hit its highest level in more than 8 months. All the nineteen sectoral indices on BSE ended in green.
The Sensex and the Nifty edged higher for the fifth straight trading session on Friday, 1 July 2016. The barometer index, the S&P BSE Sensex rose 145.19 points or 0.54% to settle at 27,144.91. The Nifty 50 index rose 40.60 points or 0.49% to settle at 8,328.35. The Sensex settled above the psychologically important 27,000 level after regaining that level in opening trade. The Sensex hit its highest closing level in more than eight months. The Nifty hit its highest closing level in more than ten months. The market sentiment was positive on the back of data showing substantial purchases of Indian stocks by foreign portfolio investors (FPIs) on Thursday, 30 June 2016.
State-run Bharat Heavy Electricals (Bhel) was the top Sensex gainer last week. The stock jumped 11.54% to Rs 131.90.
Engineering and construction major L&T rose 7.47% to Rs 1.540.65 after the company announced the price band for the proposed initial public offering (IPO) of equity shares of its subsidiary, L&T Infotech. L&T announced the price band of Rs 705 to Rs 710 per equity share for IPO of its subsidiary L&T Infotech. A discount of Rs 10 per share will be offered to retail individual bidders. L&T is selling up to 1.75 crore shares of L&T Infotech through the IPO. The company said that the Red Herring Prospectus filed by the company's subsidiary L&T Infotech with the Registrar of Companies, Maharashtra, for an offer for sale (OFS) of shares by L&T was approved on 28 June 2016. The offer of L&T Infotech shares will open for subscription on 11 July 2016 and close on 13 July 2016. The announcement was made after market hours on Wednesday, 29 June 2016.
Drug maker Dr Reddys Laboratories rose 10.38% to Rs 3,477.25. The company bought back 50.77 lakh equity shares at an average price of Rs 3,090.92 per share as part of a 'share buyback' offer launched earlier this year. The company's shareholders approved the buyback offer on 1 April 2016. The announcement was made on Thursday, 30 June 2016.
Among other pharma companies, Cipla rose 6.59% to Rs 507.90. Sun Pharmaceutical Industries rose 1.36% to Rs 764.
Index heavyweight and cigarette major ITC ended the week at Rs 252.35. The stock turned ex-bonus on Friday, 1 July 2016, for 1:2 bonus issue.
IT stocks fell on concerns that losses for the British pound and euro in the wake of the UK's vote last week to leave the European Union (EU) will adversely impact Indian IT companies' revenue in dollar terms. TCS (down 2.68%) and Infosys (down 1.88%), edged lower. Wipro rose 0.45%. Indian IT companies derive about 25% of their revenue from Europe.
Coal India fell 0.50% at Rs 310.10. 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 on Tuesday, 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 on Wednesday, 29 June 2016.
Car major Maruti Suzuki India rose 2.38% to Rs 4,165.80. The company announced during market hours on Friday, 1 July 2016, that total sales declined 13.9% to 98,840 units in June 2016 over June 2015. Domestic sales dropped 10.2% to 92,133 units in June 2016 over June 2015. Exports slumped 44.7% to 6,707 units in June 2016 over June 2015.
Among motorcycle makers, Hero MotoCorp rose 3.95%. Bajaj Auto fell 0.38%.
Commercial vehicles major Tata Motors rose 1.98% to Rs 457.90.
Mahindra & Mahindra (M&M) rose 5.11% at Rs 1,460.70. The company reported a 20% increase in its total tractor sales at 30,191 units in June 2016 over June 2015.
Domestic tractor sales rose 20% to 28,797 units in June 2016 over June 2015. Exports rose 17% to 1,394 units in June 2016 over June 2015. The company announced the sales volume data during market hours on Friday, 1 July 2016. Separately, M&M during market hours on Friday, 1 July 2016 said its total auto sales rose 8% to 39,011 units in June 2016 over June 2015. Domestic auto sales rose 5% to 34,991 units in June 2016 over June 2015. Exports rose 41% to 4,020 units in June 2016 over June 2015.
GAIL (India) rose 4.94% at Rs 395.25 on divesting a part of its stake in Mahanagar Gas through an initial public offer (IPO). GAIL (India) and BG Asia Pacific Holdings Pte, the two promoters of Mahanagar Gas (MGL), sold about 1.23 crore shares each of MGL via an IPO of MGL. The IPO opened for bidding on 21 June 2016 and concluded on 23 June 2016. Shares of MGL debuted on stock exchanges on Friday, 1 July 2016. The stock made its debut on the bourses at Rs 540, at a premium of 28.26% over the issue price of Rs 421. It settled at Rs 519.90 on BSE, at a premium of 23.49% over its IPO price.
State-run State Bank of India (SBI) rose 3.98% to Rs 219.65. The bank said that the Executive Committee of the Central Board in its meeting held on Wednesday, 29 June 2016, approved to raise long term funds up to $1.5 billion in single/multiple tranches through a public offer and/or private placement of senior unsecured notes in US dollar or any other convertible currency during the year ended 31 March 2017 (FY 2017). The announcement was made during market hours on Wednesday, 29 June 2016.
Private sector lender ICICI Bank rose 4.05% to Rs 240.40. Axis Bank rose 6.36% to Rs 542.80.
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. The Union Cabinet on Wednesday, 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.
Gains in global markets also aided the upmove on the domestic bourses. World stocks rose as worries subsided about the fallout from the UK's decision to leave the European Union known as Brexit. The UK voted to leave the European Union (EU) in a referendum on 23 June 2016. The unexpected referendum result sent shock waves through the UK parliament, leaving the two biggest political parties in turmoil.
Back home, the barometer index, the S&P BSE Sensex, rose 747.20 points or 2.83% to settle at 27,144.91. The Nifty 50 index rose 239.75 points or 2.96% to settle at 8,328.35.
The BSE Mid-Cap index rose 4.81%. The BSE Small-Cap index rose 5.38%.
Trading for the week started on a subdued note. Amid a divergent trend among various index constituents, the two key benchmark indices settled near the flat line on Monday, 27 June 2016. The barometer index, the S&P BSE Sensex, rose 5.25 points or 0.02% to settle at 26,402.96. The Nifty 50 rose 6.10 points or 0.08% to settle at 8,094.70. Volatility was high throughout the session. IT stocks extended losses registered during the previous trading session triggered by the UK voting to leave in the European Union in a historic referendum on 23 June 2016.
A recovery in European stocks and gains in US index futures aided the upmove on the domestic bourses on Tuesday, 28 June 2016. The barometer index, the S&P BSE Sensex, rose 121.59 points or 0.46% to settle at 26,524.55. The Nifty 50 index rose 33.15 points or 0.41% to settle at 8,127.85. The Sensex and the Nifty edged higher for the second straight trading session. Italian banks led gains in European stocks after reports that the Italian government is looking at adding €40 billion ($44 billion) to protect the country's financial system in the wake of the UK's vote to leave the European Union last week.
A recovery in global stocks from losses triggered by last week's unexpected outcome of the UK referendum for the country to leave the European Union (EU) aided gains on the domestic bourses on Wednesday, 29 June 2016. The barometer index, the S&P BSE Sensex, rose 215.84 points or 0.81% to settle at 26,740.39. The gains for the Nifty 50 index were higher than those for the Sensex in percentage terms. The Nifty 50 index rose 76.15 points or 0.94% to settle at 8,204. With third straight day of gains, the Sensex and the Nifty, both, attained their highest closing level in almost a week. World stocks rose on speculation that central banks in the UK, Japan and the European Central Bank may boost monetary stimulus to counter a potential drag on the global economy from the UK's vote to leave the European Union known as Brexit. With the lone exception of the BSE FMCG index, all the other sectoral indices on BSE ended in positive zone.
Stocks of power sector firms, telecom companies and private sector banks led gains for the two key benchmark indices on Thursday, 30 June 2016. The barometer index, the S&P BSE Sensex, rose 259.33 points or 0.97% to settle at 26,999.72. The Nifty 50 index rose 83.75 points or 1.02% to settle at 8,287.75. After opening with an upward gap, the two key benchmarks hovered in positive territory throughout the trading session. The Sensex settled a tad below the psychologically important 27,000 level after surpassing that mark in intraday trade. The Sensex and the Nifty edged higher for the fourth straight trading session. The Sensex attained one-week closing high. The Nifty hit its highest level in more than 8 months. All the nineteen sectoral indices on BSE ended in green.
The Sensex and the Nifty edged higher for the fifth straight trading session on Friday, 1 July 2016. The barometer index, the S&P BSE Sensex rose 145.19 points or 0.54% to settle at 27,144.91. The Nifty 50 index rose 40.60 points or 0.49% to settle at 8,328.35. The Sensex settled above the psychologically important 27,000 level after regaining that level in opening trade. The Sensex hit its highest closing level in more than eight months. The Nifty hit its highest closing level in more than ten months. The market sentiment was positive on the back of data showing substantial purchases of Indian stocks by foreign portfolio investors (FPIs) on Thursday, 30 June 2016.
State-run Bharat Heavy Electricals (Bhel) was the top Sensex gainer last week. The stock jumped 11.54% to Rs 131.90.
Engineering and construction major L&T rose 7.47% to Rs 1.540.65 after the company announced the price band for the proposed initial public offering (IPO) of equity shares of its subsidiary, L&T Infotech. L&T announced the price band of Rs 705 to Rs 710 per equity share for IPO of its subsidiary L&T Infotech. A discount of Rs 10 per share will be offered to retail individual bidders. L&T is selling up to 1.75 crore shares of L&T Infotech through the IPO. The company said that the Red Herring Prospectus filed by the company's subsidiary L&T Infotech with the Registrar of Companies, Maharashtra, for an offer for sale (OFS) of shares by L&T was approved on 28 June 2016. The offer of L&T Infotech shares will open for subscription on 11 July 2016 and close on 13 July 2016. The announcement was made after market hours on Wednesday, 29 June 2016.
Drug maker Dr Reddys Laboratories rose 10.38% to Rs 3,477.25. The company bought back 50.77 lakh equity shares at an average price of Rs 3,090.92 per share as part of a 'share buyback' offer launched earlier this year. The company's shareholders approved the buyback offer on 1 April 2016. The announcement was made on Thursday, 30 June 2016.
Among other pharma companies, Cipla rose 6.59% to Rs 507.90. Sun Pharmaceutical Industries rose 1.36% to Rs 764.
Index heavyweight and cigarette major ITC ended the week at Rs 252.35. The stock turned ex-bonus on Friday, 1 July 2016, for 1:2 bonus issue.
IT stocks fell on concerns that losses for the British pound and euro in the wake of the UK's vote last week to leave the European Union (EU) will adversely impact Indian IT companies' revenue in dollar terms. TCS (down 2.68%) and Infosys (down 1.88%), edged lower. Wipro rose 0.45%. Indian IT companies derive about 25% of their revenue from Europe.
Coal India fell 0.50% at Rs 310.10. 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 on Tuesday, 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 on Wednesday, 29 June 2016.
Car major Maruti Suzuki India rose 2.38% to Rs 4,165.80. The company announced during market hours on Friday, 1 July 2016, that total sales declined 13.9% to 98,840 units in June 2016 over June 2015. Domestic sales dropped 10.2% to 92,133 units in June 2016 over June 2015. Exports slumped 44.7% to 6,707 units in June 2016 over June 2015.
Among motorcycle makers, Hero MotoCorp rose 3.95%. Bajaj Auto fell 0.38%.
Commercial vehicles major Tata Motors rose 1.98% to Rs 457.90.
Mahindra & Mahindra (M&M) rose 5.11% at Rs 1,460.70. The company reported a 20% increase in its total tractor sales at 30,191 units in June 2016 over June 2015.
Domestic tractor sales rose 20% to 28,797 units in June 2016 over June 2015. Exports rose 17% to 1,394 units in June 2016 over June 2015. The company announced the sales volume data during market hours on Friday, 1 July 2016. Separately, M&M during market hours on Friday, 1 July 2016 said its total auto sales rose 8% to 39,011 units in June 2016 over June 2015. Domestic auto sales rose 5% to 34,991 units in June 2016 over June 2015. Exports rose 41% to 4,020 units in June 2016 over June 2015.
GAIL (India) rose 4.94% at Rs 395.25 on divesting a part of its stake in Mahanagar Gas through an initial public offer (IPO). GAIL (India) and BG Asia Pacific Holdings Pte, the two promoters of Mahanagar Gas (MGL), sold about 1.23 crore shares each of MGL via an IPO of MGL. The IPO opened for bidding on 21 June 2016 and concluded on 23 June 2016. Shares of MGL debuted on stock exchanges on Friday, 1 July 2016. The stock made its debut on the bourses at Rs 540, at a premium of 28.26% over the issue price of Rs 421. It settled at Rs 519.90 on BSE, at a premium of 23.49% over its IPO price.
State-run State Bank of India (SBI) rose 3.98% to Rs 219.65. The bank said that the Executive Committee of the Central Board in its meeting held on Wednesday, 29 June 2016, approved to raise long term funds up to $1.5 billion in single/multiple tranches through a public offer and/or private placement of senior unsecured notes in US dollar or any other convertible currency during the year ended 31 March 2017 (FY 2017). The announcement was made during market hours on Wednesday, 29 June 2016.
Private sector lender ICICI Bank rose 4.05% to Rs 240.40. Axis Bank rose 6.36% to Rs 542.80.
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