Freight sops pull Sensex off the red

The Railway Budget's initiative to further simplify freight tariffs, with a discount for high-traffic commodities, proved to be a breather for Dalal Street. The benchmark Sensex ended with a gain of 17 points (0.1 per cent) at 13,649.52 points, recovering from a 257-point loss during the day.

The Sensex on Monday opened in green at 13,684.95 points, but soon fell 300 points intraday to 13,383.88 points as the Rail Budget proposals started trickling in, before the smart pullback in the last hour of trading.

Similarly, the broad-based S&P CNX Nifty gained 3.05 points (0.3 per cent) to end at 3,942, after witnessing a fall of 85 points. "I think, the correction is over. Technicals show the next level of resistance on the upside at 3,991 level and again at 4040 level," said an analyst with a local brokerage firm.

Analysts said the proposals, including reduced freight charges for diesel and petrol and reclassification of minerals and ores, would benefit oil, cement and metal scrips in the medium term. Tata Steel went up 2.29 per cent to Rs 469.70.

Steel Authority of India was up 2.06 per cent to Rs 113.80, as the reduction in iron ore freight rates would mean lesser input costs for the companies. The 5 per cent reduction in diesel and petrol freight will also benefit these companies.

The reduction will help oil PSUs improve their operating margins. Hindustan Petroleum was up 0.95 per cent at Rs 277.60, while Bharat Petroleum went down by 0.7 per cent to Rs 316.70.

Cement shares too surged as limestone freight charges were cut by 5 per cent. Gujarat Ambuja was up 3.83 per cent at Rs 127.55. ACC gained 3.30 per cent to Rs 945.90 and Grasim to Rs 2,341.15 (up 3.08 per cent).

The Budget brought a good reason to cheer for rail logistic and engineering companies, as it initiated the phasing out of low axle load container wagons, upgradation of 20,000 km high density rail lines and new capacity addition for passenger coaches.

Bharat Earth Movers was up 2.99 per cent at Rs 1,128.33, Engineers India surged 3.74 per cent at Rs 505, Kalindee Rail Nirman Engineers was down 0.17 per cent to Rs 175.85, while Stone India advanced 3.51 per cent to Rs 159.40.