Freight hike throws cement, fertiliser stocks off the track
Last Updated: Thursday, February 26, 2015, 18:20
Mumbai: Stocks of cement, fertiliser and steel companies suffered losses today following the proposal to hike rail freight by up to 10 percent amid concerns that the firms will not be able to fully pass on the higher rates.
Shares of UltraTech Cement dropped 2.15 per cent, Heidelberg Cement dipped 1.4 percent, Shree Cement lost 0.93 per cent, ACC fell by 0.58 percent and Ambuja Cements was down 0.54 percent on the BSE.
Among steel stocks, SAIL dipped 3.21 percent, Tata Steel fell by 1.62 percent and JSW Steel slipped 0.88 percent.
Fertiliser stocks also witnessed selling pressure. National Fertilizer was down 1.85 percent, Tata Chemicals dropped 1.82 percent, Gujarat State Fertilizers shed 1.39 percent and Gujarat Narmada Valley Fertilizers Chemicals lost 0.37 percent.
Shares of CIL was down 0.70 percent.
Analysts said, stocks of cement and steel makers fell as investors were unsure of whether companies will be able to fully pass on the hikes in a weak demand scenario.
Prices of food grain, pulses, cement, coal and steel are likely to go up following the proposal to hike rail freight by up to 10 percent for various commodities.
The Railway Budget proposals, presented by Union Minister Suresh Prabhu in Parliament today, proposed a hike in freight rates for 12 commodities in the range of 0.8 percent to 10 percent.
"Markets fell post railway freight rate hike," said Aamir Mir, Senior Analyst, HBJ Capital.
The proposed freight hike for cement, coal, iron and steel, grains & pulses, groundnut oil, LPG and kerosene is 2.7 percent, 6.3 percent, 0.8 percent, 10 percent, 2.1 percent, 0.8 percent and 0.8 percent respectively.
Meanwhile, in the broader market, the BSE benchmark Sensex ended at 28,746.65, down 261.34 points.
PTI
First Published: Thursday, February 26, 2015, 18:20
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