The G20 summit gave another reason for multibagger railway stocks to fly off the charts and rally up to 15%. PSU rail stock IRCON International, which has already doubled investors’ wealth in the last 6 months, rallied up to 15% on Monday to hit a fresh 52-week high at Rs 154.65.

IRFC shares zoomed 10% to hit the upper circuit limit at a fresh high of Rs 84.76. Shares of RVNL were also up 9.4% while Titagarh Wagons was trading 5% higher. Buying momentum was also seen in Railtel, RITES and Texmaco Rail which were up 2-3% each.

Although rail stocks have been rallying on the back of a strong government order book and railways modernisation programme, today’s buying was attributed to Saturday’s announcement of a shipping and rail transportation corridor linking countries across the Middle East, South Asia and Europe on the sidelines of the G20 Summit in New Delhi.

The announcement of a new corridor will lead to a comprehensive rail and shipping connectivity network linking the US, India, Saudi Arabia and Gulf and Arab states, and the European Union. The plan aims to integrate railway routes and port linkages, spanning from India to Europe, traversing through the United Arab Emirates, Saudi Arabia, Jordan, and Israel.

Investment advisor Sandip Sabharwal said that such projects may take 8-10 years to come through as they require a lot of agreement between different countries and have a very long gestation period.

“Buying those stocks now in the expectation that things will happen might not be such a great idea, especially when many of these stocks have run up so fast,” he said.

Technical analysts also say most PSU rail stocks are now in an overbought state.

“4 out of 5 major railway stocks like RVNL, IRFC, IRCTC and Railtel are overbought with RSI above 75. Even though the outlook for these stocks remains bullish, expect some profit booking in the near term before the bulls regroup. Apart from that, railway-related stocks like BEML and Concor have more steam left in them which could attract buying in the near term,” said Anand James of Geojit Financial Services.

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