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Railway Stocks Rally Up to 15% After G20 Summit Announcement

Railway Stocks Rally Up to 15% After G20 Summit Announcement
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Multibagger railway stocks saw a significant surge, with some rallying up to 15% following the G20 summit. PSU rail stock IRCON International, which had already doubled investors’ wealth in the last 6 months, climbed up to 15% on Monday, reaching a fresh 52-week high at Rs 154.65.

IRFC shares also made substantial gains, soaring 10% to hit the upper circuit limit, achieving a fresh high of Rs 84.76. RVNL shares were up 9.4%, while Titagarh Wagons traded 5% higher. Railtel, RITES, and Texmaco Rail also witnessed buying momentum, with each gaining 2-3%.

The rally in rail stocks has been attributed to a strong government order book and the railways’ modernization program. However, Monday’s buying surge was linked to the announcement at the G20 summit in New Delhi regarding a shipping and rail transportation corridor that would connect countries across the Middle East, South Asia, and Europe.

This new corridor is set to establish an extensive rail and shipping connectivity network linking the US, India, Saudi Arabia, Gulf and Arab states, and the European Union. The plan envisions integrating railway routes and port linkages, spanning from India to Europe, with routes passing through the United Arab Emirates, Saudi Arabia, Jordan, and Israel.

While these developments have sparked investor enthusiasm. Projects of this magnitude typically have long gestation periods, often spanning 8-10 years due to the need for agreements between multiple countries.

Technical analysts also pointed out that most PSU rail stocks are currently in an overbought state, with the RSI (Relative Strength Index) above 75 for 4 out of 5 major railway stocks, including RVNL, IRFC, IRCTC, and Railtel. While the outlook for these stocks remains positive, some profit booking may be expected in the near term before another bullish phase.

Disclaimer: The information provided here is for educational purposes only and should not be considered financial advice. Always conduct thorough research and consider consulting a financial professional before engaging in algorithmic trading.

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