Shares of Hero MotoCorp and TVS Motor Company surged as much as 5 per cent and 2 per cent, respectively.
Shares from auto, consumer durables retail sector advanced on Wednesday after the Union Cabinet approved the 7th Pay Commission recommendations. The announcement will be a bonanza for over 1 crore central government employees and pensioners.
Cheering the announcment, shares of Hero MotoCorp and TVS Motor Company surged as much as 5 per cent and 2 per cent, respectively. Likewise, the BSE Auto index jumped 1.68 per cent intraday.
Retail majors such as Shoppers Stop and Future Enterprises also jumped over 4 per cent and 5 per cent intraday, respectively. According to market experts, there will be higher disposable income and more discretionary spendings after the salary hikes.
In the consumer durables space, shares of Nilkamal jumped over 9 per cent intraday. Blue Star, Whirlpool and Voltas also jumped upto 3 per cent intraday. The BSE Consumer Durables index was trading 1.15 per cent up in the late afternoon trade.
Nikhil Kamath, co-founder and director, Zerodha said, “While more money in the hands of pensioners and central government employees is bound to boost consumption. Sectors which could see growth from these amendments will be the FMCG, auto and real estate sectors.”
Pankaj Sharma, head of equities, Equirus Securities said, “The 7th Pay Commission will benefit autos, consumer durables and residential real estate only if there is a large arrear pay out.”