Market Commentary -26/12/2008

he market firmed up in mid-afternoon trade after Rail Minister Lalu Prasad Yadav provided thrust on modernising rail infrastructure in Railway Budget which he presented to parliament today. The market had opened on a firm note today tracking steady to firm trend in Asian stocks. Metal, capital goods, banking, realty and power stocks rose.

The market breadth was strong. Mid-cap and small-cap indices outperformed Sensex. 21 stocks from 30-member Sensex pack were in the green.

Railway Minister Lalu Prasad today announced a cut in freight rates by 5% on petrol and diesel in the Railway Budget for 2008/09. He also announced a reduction of 5% in fares for second class sleeper-class passengers. Yadav cut the fare of air conditioned (AC) I-tier by 7%, AC II-tier by 4%, and AC III-tier by 3%. The Indian railways will offer discounts on charges for freight booked during lean seasons Yadav told parliament in his budget speech

The Railway Minister said Indian Railways will report a cash surplus of Rs 25,000 crore in FY 2008-09. Railways will invest Rs 75,000 crore to upgrade infrastructure over the next seven years and also to start making steel coaches from FY 2009 and introduce them from FY 2010. There will be no peak season surcharge on cement transport.