Sensex shakes off Brexit jitters, up 216

Stocks rise 0.8% on govt wage bonanza, GST hopes; auto, retail stocks big movers

Stocks advanced to a oneweek high after the government approved an increase in salaries for civil servants, spurring optimism the payout will bolster consumption that has been the key driver of the nation’s worldbeating growth.

The S&P BSE Sensex stayed in the positive terrain throughout and closed up 215.84 points, or 0.81%, at 26,740.39.

Automakers Hero MotoCorp and Tata Motors were the best performers on the S&P BSE Sensex, while Asian Paints climbed the most in a month. Tata Metaliks rose the most in two weeks, and staterun iron ore miner NMDC climbed to a seven-week high after the government approved a new mineral exploration policy. Property developer DLF jumped the most in four months after its billionaire founder brought shares.

The Sensex rose 0.8% at the close, paring its loss since the Brexit vote to less than 1%. The stimulus from higher government wages comes at a time when a revival in company earnings, improving economic dataandprospectsof above-normal rainfall have put the gauge on course for its first quarterly advance in more than a year.

“Brexit is getting priced in with each passing day," Ashish Kukreja, chief executive officer at Mumbai-based Craft Financial Advisors, said by phone from Mumbai. “The focus is now on the monsoon, June-quarter earnings, the pay commission’s award and the monsoon session of Parliament where the GST bill is likely to be cleared. We are very positive on the markets.”

The gover nment would seek to pass a constitutional amendment authorising the goods and services tax (GST) in the monsoon session of Parliament starting July 18, parliamentary affairs minister Venkaiah Naidu said in New Delhi.

The Sensex also tracked global equities, which rose for a second day amid speculation that policy makers will mitigate the damage of the Brexit vote, including a pause in the Federal Reserve’s tightening cycle. The MSCI All-Country World Index rose 1% at 12.30 pm in London and the Stoxx Europe 600 Index climbed 2.4%. The equity gauge has recouped 5% after tumbling 11% over two days after the vote.

Bloomberg