Freight hike throws cement, fertiliser stocks off the track

Thursday, Feb 26, 2015,18:06 IST By metrovaartha A A A

Mumbai | Stocks of cement, fertiliser and steel companies suffered losses today following the proposal to hike rail freight by up to 10 per cent 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 per cent, Shree Cement lost 0.93 per cent, ACC fell by 0.58 per cent and Ambuja Cements was down 0.54 per cent on the BSE.
Among steel stocks, SAIL dipped 3.21 per cent, Tata Steel fell by 1.62 per cent and JSW Steel slipped 0.88 per cent.
Fertiliser stocks also witnessed selling pressure. National Fertilizer was down 1.85 per cent, Tata Chemicals dropped 1.82 per cent, Gujarat State Fertilizers shed 1.39 per cent and Gujarat Narmada Valley Fertilizers Chemicals lost 0.37 per cent.
Shares of CIL was down 0.70 per cent.
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 per cent 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 per cent to 10 per cent.
The proposed freight hike for cement, coal, iron and steel, grains & pulses, groundnut oil, LPG and kerosene is 2.7 per cent, 6.3 per cent, 0.8 per cent, 10 per cent, 2.1 per cent, 0.8 per cent and 0.8 per cent respectively.
Meanwhile, in the broader market, the BSE benchmark Sensex ended at 28,746.65, down 261.34 points.