The stock market is unpredictable, with its ups and downs often following the pulse of geopolitical events and economic trends. In the past week, we saw a clear example of how a sudden shift in war news can create market trends. The Nifty50 index surged by a solid 4.21 percent, thanks to a ceasefire between India and Pakistan, which immediately boosted investor sentiment.
As tensions eased, market participants sought to capitalise on the opportunity, diving into stocks the initial volatility had impacted. Among the sectors that drew significant attention were defence stocks, with investors rushing in to grab what seemed like a brief opportunity in a historically volatile sector. However, another sector quietly emerged from the shadows – railway stocks.
It’s not every day that the Indian railway sector grabs the limelight in the equity market. But last week hinted at something new, a potential turning point. Railway stocks, which had a stellar rally up until mid-2023, faced a steep correction between 30 percent and 50 percent during the latter half of 2024. The bear phase seemed relentless, but just as quickly as it arrived, something changed. A rally began to unfold in the railway stocks once again, suggesting that we might be witnessing the potential birth of a new trend.
With no dedicated sectoral indices on railways from major exchanges like NSE or BSE, we took it upon ourselves to create a customised index to track this budding sector – Definedge Railways Equal Weighted Index. The index is created using 11 stocks – BEML, Containter Corporation of India, IRCON International, IRCTC, Indian Railway Finance Corporation, Jupiter Wagons, RailTel Corporation of India, RITES, Rail Vikas Nigam, Texmaco Rail Engineering, and Titagarh Rail Systems.
Together, these stocks form the heartbeat of India’s railway infrastructure and services, and their performance can offer a window into the health and future potential of the sector as a whole.
