The Stock market breadth remained positive as about two shares advanced for every share falling on BSE.
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Max Financial Services shares rallied 20 percent and HDFC gained 2 percent intraday after a media report indicated there are merger talks between companies for their life insurance business.
Axis Bank also gained over a percent as the bank holds 5.99 percent stake in Max Life. Tata Motors, Maruti Suzuki, Dr Reddy's Labs and Coal India added a percent while Infosys, Sun Pharma, L&T and Tata Steel were marginally lower.
The S&P BSE Sensex gained 153 points to quote at 26,679 and the Nifty50 rose 37 points to trade at 8,176. Max Financial Services has zoomed 20% to Rs 514, also its 52-week high on the BSE in intra-day trade on heavy volumes.
The rally comes on the back of reports that HDFC Life and Max Life are in talks to create the country's biggest private life insurer.
V-Guard Industries has rallied 11% to Rs 1,470, also its record high on the National Stock Exchange (NSE) after the company announced that its board approved the proposal for splitting of equity shares in the ration of 1:10.