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Rail Budget: Infra Stocks Steady

Mamata Banerjee cheered up some infrastructure stocks today

Sentiment has ruled markets whenever a big event, political or financial, happens anywhere in the world. We saw an instance of that when the Congress led UPA government retained its power at the Centre. It was enough for markets to strap booster-rockets to itself and vroom into the sky then.

But that is not always the case. Although rising expectation of financial reforms should be driving markets up again, with the Budget around the corner, and the Rail Budget presented today, yet we have just ended the month of June with the Sensex not gaining anything from May’s closing figures.

Today, the Rail Budget was able to elicit some positive reaction from the Sensex, but the euphoria was missing as the Bombay Stock Exchange sensitive index closed 1.7 per cent up. Among the top gainers today in the BSE ‘A’ list were: Chambal Fert (8.00%), Jain Irrig (8.15%), Glenmark Pharma (7.90%), HDFC (7.74%), Rel Natural Resource (6.84%).

However, there is still some room for maneuvering. While most stocks were ending flat in June, yet the sectors that are expected to receive government largesse, like infrastructure, are gaining steadily. Let us say that investors are doing some big-game hunting – which is not a surprise as in May, all those who were burnt by the October market crisis, would have taken anything and everything that was thrown at them as long as it made some returns.

The unveiling of the Rail Budget caused some stocks to quickly charge out of the blocks. Some of these are related to those sectors that are expected to get railway projects. However, not all of these headed up, some gave a mixed reaction, while others remained unmoved.

Bharat Heavy Electricals. It rose to Rs 2182.05, which is higher than its yesterday’s close of Rs 2149.90.

L&T. It rose to Rs 1,607.70 against yesterday’s closing at Rs 1,563.60.

NTPC. Stocks closed at Rs 204.35 against yesterday’s closing at Rs 199.85

Among the laggards today at The Bombay Stock Exchange are:

Kalindee Rail Nirman Engineers. It closed at Rs 212.40, well under yesterday’s close of Rs 223.55.

Titagarh Wagons. It registered a fall, closing at Rs 417.35, well under its yesterday’s close of Rs 439.30.

Texmaco. Displayed similar figures as it fell to Rs 114.45 lower than yesterday’s close of Rs 120.45.

BEML. It closed at Rs 1,033.00 against its yesterday’s close of Rs 1,081.75.

Reality, however, is complex. Market analysts are saying that these stocks generally witness a sharp run-up ahead of the Budget and fall significantly after the announcements are made.

Shares At A Glance
Company  Prev Close  LTP  Net Change  Change %
Kalindee Rail Nirman Engineers 223.55 212.4 -11.15 -4.99
Container Corporation 971.45 1010.35 38.9 4.00
BEML 1,081.75 1,033.00 -48.75 -4.51
Simplex Casting 61.6 62.15 0.55 0.89
Kernex Microsystems 131.7 126.3 -5.4 -4.10
Titagarh Wagons 439.3 417.35 -21.95 -5.00
Texmaco 120.45 114.45 -6 -4.98
Stone India 44.95 47.15 2.2 4.89
Hind Rectifiers 61.7 60.75 -0.95 -1.54
BHEL 2,149.90 2,160.65 -48.75 -4.51
L&T 1,563.60 1,607.70 44.1 2.82
NTPC 199.85 204.35 4.5 2.25