The stocks of companies involved in railways and its allied activities soar on Monday in the wake of an ambitious rail-port economic corridor deal to connect India-Middle East-Europe as an alternate supply chain route which was signed on the sidelines of the G20 Summit in New Delhi.
The new deal has put the focus on railway infrastructure and shares of companies like Indian Railway Finance Corp, the funding arm of the Indian Railways, hit a 10 per cent upper circuit minutes after the opening bell on Monday.
Apart from IRFC, Rail Vikas Nigam, RITES, Railtel Corporation of India, and Titagarh Rail Systems were in the range of 3 to 9 per cent higher at around 10.30 am.
The deal was signed between Saudi Arabia, the European Union, India, United Arab Emirates (UAE), France, Germany, Italy and the United States to work together and establish the India-Middle East-Europe Economic Corridor (IMEC).
The corridor is aimed at stimulating the economic development through enhanced connectivity and economic integration between Sisa, the Arabian Gulf, and Europe.
The IMEC will include two separate corridors, the east corridor to connect India to the Arabian Gulf and the northern corridor connecting the Arabian Gulf to Europe.
It will include both railways and and a cable for electricity and digital connectivity along with a pipe for clean hydrogen export. The railway route will provide a reliable and cost-effective cross-border ship-to-rail transit network to supplement the existing maritime and road transport routes to enable the transit of goods and services to transit to, from, and between India, the UAE, Saudi Arabia, Jordan, Israel and Europe.
Meanwhile, the broader Indian stock indices opened on a strong note taking cues from the overall successful G20 Summit in New Delhi.
The consensus on the New Delhi declaration by all G20 member countries despite a divided house given the ongoing war in Ukraine and the West’s sanctions on Russia, the ambitious rail-port economic corridor deal to connect India-Middle East-Europe, and the launch of Global Biofuel Alliance on the summit sidelines seemed to have attracted investors to bet in the market.
Sensex and Nifty were 0.3-0.4 per cent higher from their Friday close of 66,861.16 points and 19,910.10 points, with all sectoral indices in the green. Last week, Indian stocks ended at a high to log their best week in over two months
Going ahead, August inflation data in India and the US, expected to be released on Tuesday and Wednesday are likely to be the next market trigger for fresh cues.
Retail inflation in India rose sharply in July to 7.44 per cent and in the process breached RBI's 6 per cent upper tolerance target, largely due to a sharp spurt in vegetable, fruit, and pulses prices.