Cement, steel stocks gain on freight rate cut

Shares of cement, steel, and oil companies were among the gainers on Tuesday backed by positive signals from the Railway Budget. Proposals of large investments for railway modernisation have boosted the market sentiments, said a stock trader.

Sensex touched the day’s high of 17,860 points soon after the Budget proposals were announced, but ended the day lower at 17,806 with a gain of 155 points or 0.88 per cent. Nifty gained 1.33 per cent.

The 14 per cent cut in freight rate for fly ash gave a boost to the cement companies. Major gainers included Grasim Industries (5.06 per cent), ACC (1.53 per cent) and Ambuja Cement (0.65 per cent).

“Fly ash constitutes 25 per cent of the input in cement manufacturing and the freight reduction will definitely give a fillip to the cement industry,” said Mr Hitesh Agrawal, Head of Research, Angel Broking. Other gainers included Ultratech (0.78 per cent), India Cements (4.77 per cent), Binani (3.09 per cent), Madras Cement (2.04 per cent) and Burnpur Cement (4.55 per cent).

According to Mr J. Mehra, CEO, Essar Steel Holdings, the proposed increase in investments on new railway lines and addition of 20,000 new wagons to the railway fleet augurs well for the steel industry.

Shares of Jindal Stainless’, which enjoys 40-45 per cent of the stainless steel market, went up by 7.19 per cent.

Other steel companies scrips also went up: SAIL (2.57 per cent), Jindal Steel (4.16 per cent) and Bhusan Steel (4.04 per cent). However, Tata Steel closed flat. The much-battered public sector oil retailing companies gained after the Railway Minister announced five per cent cut in freight rate for petrol and diesel. Indian Oil gained 4.17 per cent; BPCL gained 5.38 per cent and HPCL went up 4.75 per cent.