The 7th Central Pay Commission's (CPC) proposals, if accepted by the Narendra Modi government on Wednesday at the proposed Cabinet meeting, could trigger a rally on Sensex and select stocks.
The biggest gainers could be fast moving consumer goods (FMCG) stocks that outperformed the respective benchmark indices â€” BSE Sensex and NSE Nifty â€” on Tuesday ahead of the likely Cabinet meeting. The Sensex was up 0.46 percent and the Nifty 50 closed 0.41 percent higher.
On the BSE, FMCG index gained 1.75 percent, while the Nifty FMCG was the highest sectoral gainer, up 2.07 percent, followed by Nifty Realty at 1.04 percent.
The biggest FMCG gainer on the BSE was cigarette-making company Godfrey Philips that closed 8.77 percent higher at Rs. 901.95. Other prominent companies that ended in the green included Hindustan Unilever (up 3.25 percent at Rs. 887.75), ITC (up 2.59 percent) and Britannia Industries (2.16 percent).
On the NSE also, these companies were the top gainers in the Nifty FMCG sectoral index. The rally in FMCG stocks was apparently in response to the buzz in the media that the Modi government could accord its approval to the 7th CPC's recommendations.
Select scrips in the auto space rallied on Tuesday in the range of 1.2 to 3 percent, with tyre maker MRF being the biggest gainer at 2.98 percent, followed by Bosch, Eicher Motors, Motherson Sumi Systems, Maruti Suzuki, Apollo Tyes and TVS Motor Co.
Incidentally, automobile companies will be declaring their volume sales for June on Friday.
Godrej Properties gained 7.17 percent to close at Rs. 359.30, followed by Phoenix Mills, Unitech and NBCC. A spurt in home buying is also bound to lead in an increase in demand for home loans, bringing relief to commercial banks that are saddled with bad loans, predominantly to large industries.
IT stocks extend losses
In contrast, the information technology indices on both the exchanges lost about 1 percent, on persisting fears of Brexit on their revenues and future growth. Infosys, TCS, Tech Mahindra and Wipro ended in the red.