Indian Stocks Rise; Railways Budget

Mukesh Buch
03 Jul, 2009
New York City

Indian Railways left its freight and passenger fares unchanged and proposed to add more wagons and build a coach manufacturing facility. Stocks gained on the hopes that the national budget will allocate more capital to power, infrastructure and telecom sector.

[R]7:00 PM Mumbai, 9:30 AM New York – Indian Railways left its freight and passenger fares unchanged and proposed to add more wagons and build a coach manufacturing facility. Stocks gained on the hopes that the national budget will allocate more capital to power, infrastructure and telecom sector.[/R]

The Indian Railways in its annual budget proposed to spend more money to build more coaches, purchase new wagons and modernize tracks and improve select stations.

Rail Minister Mamata Banerjee proposed to set up a facility to build 500 coaches a year and purchase 18,000 wagons. The railways expect to transport 6% more cargo totaling 882 million tons of freight. The ministry estimated 58,500 crore rupees in freight revenues and 24,300 crore rupees from passenger fares.

The Sensex index in India increased 254.56 or 1.74% to 14,913.05 and CNX Nifty index increased 75.40 or 1.73% to 4,424.25.

In BSE trading, 1,334 stocks gained, 1,264 decreased and 82 were unchanged. Of the 30 stocks in the Sensex index, 25 increased and 5 decreased.

Gainers & Losers

Reliance Industries increased 0.8% to 2,025 rupees and Reliance Natural Resources filed a petition to Supreme Court to enforce the lower court judgment in favor of the company.

Bombay High Court ruled in favor of Reliance Natural and asked Reliance industries to supply 28 million cubic meters of gas daily at $2.34 per mBTU for 17 years.

State controlled oil companies closed higher after the government increased petrol and diesel prices. HPCL increased 3.5% to 330.95 rupees, Bharat Petroleum Corp added 1.5% to 459.80 and Indian Oil advanced 2.4% to 562.60 rupees.

Ahead of the national budget, power sector stocks closed higher. Power Grid Corporation of India Ltd increased 2.7% to 112.70 rupees, NTPC Ltd added 2.2% to 204.35 rupees and Tata Power Company Ltd edged up 1.5% to 1,186.45 rupees.

State Bank of India increased 2.9% after it offered fixed rate home loan of 8% for the first year and 9% for the next two years. HDFC Bank increased 3.1% and HDFC added 7.5% to 2,586.30 rupees.

Jain Irrigation increased 8.2% to 702.95 rupees on the hopes that the government will increase its budget allocation from the current 20,000 crore rupees.

Cement stocks increased after the railways budget left freight rates unchanged. Ambuja Cements closed up 1.7% to 90.80 rupees, ACC added 0.7% to 766.90 rupees and Grasim Industries edged up 0.3% to 2,408.45 rupees.

Titagarth Wagons dropped 5% to 417.35 and BEML Ltd decreased 4.5% 1,033 rupees in the railways budget the government estimated the purchase of 18,000 new wagons.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 60.08 or 0.61% to 9,816.07, Hang Seng index in Hong Kong increased 25.35 or 0.14% to 18,203.40, CSI 300 index in China higher 44.78 or 1.36% to 3,327.14. ASX 200 index in Australia decreased 49.10 or 1.27% to 3,828.20.The KL Composite index in Malaysia closed lower 6.02 or 0.56% to 1,072.69.

The Kospi Index in South Korea increased 8.56 or 0.61% to close at 1,420.04.SET index in Thailand closed lower 2.94 or 0.50% to 583.48 and JSE Index in Indonesia increased 9.55 or 0.46% to 2,075.30. The Sensex index in India increased 254.56 or 1.74% to 14,913.05.