The announcements made during the G20 summit provided a significant boost to Indian stocks, leading to a surge in Monday's trading session. This positive sentiment in the stock market even propelled the Nifty to reach its all-time high and the historic milestone of 20,000.
While rail stocks had been on the rise due to a strong government order book and railway modernisation efforts, Monday's surge was attributed to the G20 Summit's announcement of a shipping and rail transportation corridor connecting countries across the Middle East, South Asia, and Europe.
This new corridor initiative aims to establish a comprehensive rail and shipping connectivity network, linking the US, India, Saudi Arabia, Gulf and Arab states, and the European Union. The plan seeks to integrate railway routes and port linkages, spanning from India to Europe through the United Arab Emirates, Saudi Arabia, Jordan, and Israel.
After the announcement at G20, shares of IRFC witnessed a remarkable 10% surge, hitting the upper circuit limit at a fresh high of Rs 84.76. RVNL shares also gained 9.4%, while Titagarh Wagons showed a 5% increase. Buying momentum was evident in other railway-related stocks, including Railtel, RITES, and Texmaco Rail, each experiencing a 2-3% rise.
The launch of the Global Biofuel Alliance (GBA) by Prime Minister Narendra Modi on the sidelines of the G20 Summit had a positive impact on sugar stocks. Biofuels are renewable energy sources derived from biomass, and India is gradually building capacity to produce fuel from sources like crop stubble, plant waste, and municipal solid waste.
Ethanol-producing companies experienced significant gains, with Praj Industries shares hitting a 52-week high at Rs 598.6 apiece, a surge of over 15%. Shree Renuka Sugars' stock gained over 7%, while Dhampur Sugar Mills and Balrampur Chini Mills saw increases of over 3%.
Shares of Adani Ports & Special Economic Zone surged more than 4% to reach the day's high of Rs 857.70 on the NSE. Market expectations are that the company will be a primary beneficiary of the port links forming part of the economic corridor connecting the Middle East, South Asia, and eventually Europe. Additionally, Mazagon Dock Stock ended Monday's trading session 2.38% higher, while Shipping Corp of India closed the day with a 1.68% positive performance.
It's worth noting that there are currently no details available regarding the financing or timeline for the project, which involves laying down railway lines in the Middle East and connecting them to India via ports, as reported by Reuters. The Biden administration is looking to counter China's Belt and Road initiative on global infrastructure by positioning Washington as an alternative partner and investor for developing countries within the G20 grouping.