Bombay Stock Exchange building
The Bombay Stock Exchange (BSE) building is illuminated during a special "muhurat" trading session for Diwali, in Mumbai, India, Nov. 11, 2015 (Representational image).Reuters file

The S&P BSE Sensex gained for the fourth straight day on Thursday to close at a six-month high of 26,999.72 points, aided by a slew of global and domestic cues, ranging from the pay panel award to overseas equity markets making steady gains, erasing Brexit-induced losses.

Top Sensex gainers were Dr. Reddy's Labs, NTPC, Axis Bank, Tata Motors and Tata Steel.  

Here are the reasons for the Sensex rallying on the day which also marked the end of June F&O expiry:

Pay Commission boost

The government's decision to accept the recommendations of the 7th Central Pay Commission has been a big contributor to Indian stock markets rallying for two consecutive days. The news of the government likely to accept the proposals in totality laid the foundation for a bull run a day before, on Tuesday.

Positive global cues

In Britain, the benchmark index of the London Stock Exchange consolidated its two-day gains and hit a two-month high on Friday on Conservative Party leader Boris Johnson ruling himself out of the race to replace incumbent British Prime Minister David Cameron.

"That is the agenda for the next prime minister of this country. Well, I must tell you, my friends, you who have waited faithfully for the punchline of this speech, that having consulted colleagues and in view of the circumstances in parliament, I have concluded that person cannot be me," Johnson said in a speech, reported The Guardian.

The FTSE 100 — the benchmark index — was trading 0.12 percent higher at about 12.15 local time after hitting a high of 6,398.02.

"The FTSE 100 has rallied to its pre-Brexit levels and is holding on to most of yesterday's big gains this morning," The Guardian quoted Joe Rundle, head of trading at ETX Capital, as saying.

Monsoon on course

Progressive The satisfactory progress of the monsoon in the past few days also buoyed market sentiments. The India Meteorological Department (IMD) update for the period June 1 to 30 showed that the rainfall deficiency was 12 percent, indicating that the progression was broadly in line with the forecast. 

Besides, the possibility of the Goods and Services Tax (GST) Bill being taken up by the Rajya Sabha during the upcoming monsoon session of the Parliament also added to the positive sentiment.

In the morning, select stocks were trading with gains in the range of 5 to 15 percent on the BSE while the Sensex was trading 143 points higher at 26,883 at around 11.30 a.m.

The biggest gainer was GNFC, up 14.73 percent at Rs. 170.60, followed by JP Associates that was up 11.62 percent. PVR shares rose 7.18 percent on the government taking a decision to allow cinema halls and restaurants to function 24/7.

Alembic Pharmaceuticals was up after the company informed that the USFDA did not find anything adverse during its inspection of the company's plants in Mumbai.

"Alembic Pharmaceuticals Ltd has informed BSE that the Company's API Facilities i.e. API I and API II both located at Panelav have been successfully inspected by the USFDA between June 20, 2016 and June 29, 2016. The Company did not receive any Form 483 observations," it said in a regulatory filing with the BSE on Thursday.

Top 10 gainers among S&P BSE500:

a. GNFC (Rs. 170.60) 

b. JP Associates (Rs. 8.74)

c. PVR (Rs. 1,049)

d. Sadbhav Engineering (Rs. 294.25)

e. Alembic Pharma (Rs. 581)

f. GSFC (Rs. 80)

g. City Union Bank (Rs. 116.90)

h. GIC Housing Finance (Rs. 320)

i. Grindwell Norton (Rs. 733)

j. Atul (Rs. 2,035) 

Indian stock markets extended Wednesday rally tracking global cues and the overall bullish sentiment prevailing after the Narendra Modi government approved the recommendations of the 7th Central Pay Commission (CPC).

The Sensex was trading at 26,977, up 237 points, or 0.88 percent at around 10.35 a.m. Stocks that were leading the rally in the 30-scrip benchmark index were Tata Motors (up 3.2 percent), ICICI Bank (up 2.28 percent) and Hero Motocorp (up 2.13 percent).

The State Bank of India was up 1.68 percent at Rs. 220.85. The bank had informed the stock exchanges that its board had approved to raise $1,500 million in long-term funds in debt either through public offer or private placement during the current fiscal.

Shares of PVR and Inox were buzzing on the BSE after the Central government approved a legislation that would allow cinema halls, restaurants to remain open 24/7. The PVR stock was up 4.05 percent at Rs. 1,018 and shares of Inox Leisure were trading at Rs. 239.95 a piece, up 2.09 percent.

The Model Shops and Establishment (Regulation of Employment and Condition of Service) Bill, 2016 allows non-manufacturing establishments with 10 or more workers to remain open 24 hours a day, throughout the year.

The June F&O contracts expire on Thursday (today).

Among sectoral indices, the BSE Realty was up 1.77 percent, while the FMCG index was trading marginally higher at 0.87 percent.

Other stocks in the S&P BSE500 universe that were trading with high gains include GNFC (up 13.89 percent), JP Associates (up 7.92 percent), GSFC (up 7.03 percent) and Alembic Pharma (up 6.77 percent). 

The Indian rupee opened 14 paise higher at 67.54 to the US dollar on Thursday after closing at 67.68 to the greenback. The intra-day range was expected between 67.35-67.75 levels, IFA Global said in a note.

Asian equities gained on Thursday in early morning trade on the back of a firm uptrend witnessed in European and US markets for the second straight day on Wednesday.

U.S. markets extended its recovery and closed in the positive territory as worries continued to ease over Britain's vote to leave the European Union. Technology and Banking stocks, which took a hard hit after the vote showed some recovery," brokerage Angel Broking said in a note on Thursday.

"European markets too ended yesterday's trading session in the green, extending Tuesday's recovery following the BREXIT slump. Higher oil prices and possibility of monetary stimulus aided the markets," it added.

Back home, the acceptance of the recommendations of the 7th CPC is expected to drive consumption-drive growth in India in the coming months.

Story republished with additional details at 5.07 p.m.