Cochin Shipyard, Mazagon Dock and other shipping stocks buzz in trade; here is why

Shipping stocks today: Most shipping stocks, such as Mazagon Dock Shipbuilders, Garden Reach Shipping, SEAMEC, Dredging Corporation of India, Cochin Shipyard, and Shipping Corporation of India (SCI), buzzed in trade on Wednesday (April 3).

At close, Mazagon Dock Shipbuilders shares were up over 12 per cent, Cochin Shipyard shares were up nearly 9 per cent, Garden Reach Shipbuilders & Engineers shares were up nearly 7 per cent, SCI shares were up over 3 per cent, Dredging Corporation of India was nearly 4 per cent, and SEAMEC shares were up nearly 1 per cent. 

As per independent market expert Ambareesh Baliga, the buzz in the shipping space could be caused by the collapse of the Baltimore Bridge in the US state of Maryland. 

As per Baliga, the disruption caused will push the freight charges upward, which will be beneficial for the shipping companies. 

Baltimore's shipping channel has been blocked since a fully loaded container ship lost power and collided with a support column of the Francis Scott Key Bridge last Tuesday, killing six road workers and causing the highway bridge to tumble into the Patapsco River.

The Port of Baltimore opened a temporary channel on Monday (April 1), freeing some tugs and barges that had been trapped by last week's bridge collapse, but reports said the wider restoration of commercial shipping remained frustrated by unyielding conditions.

As per reports, work is underway to begin clearing the wreckage of Baltimore's Francis Scott Key Bridge a week after a cargo ship crashed into it, sending the span crashing into the harbour and killing six construction workers.

Replacing the bridge will likely take years, but authorities opened a temporary channel to allow some vessels to move around the stuck container vessel.

When did the Baltimore bridge collapse? 

On March 26, a container ship named Dali was travelling down the Patapsco River on its way to Sri Lanka. At 1:24 a.m., it suffered a total power failure, and all its lights went out. Then, the container ship struck a pylon of the bridge, crumpling almost the entire structure into the water.

The disaster may be the worst US bridge collapse since 2007, when a design error caused the I-35W bridge in Minneapolis to plunge into the Mississippi River, killing 13 people.

Besides this, another major reason why the stocks are trading with impressive gains is Jefferies' bullish stance on India's defence sector. The global brokerage, in its latest report, notes that the global geo-political tensions and India’s rising focus on self-reliance are fueling order flow and revenue growth for domestic defence companies.

The government's focus on building country-to-country relations to promote exports is the icing on the cake. Two-times growth in domestic defence spending in FY24E–30E should continue to drive stock upside, the brokerage said in its report.

India's defence exports crossed Rs 21,000 crore for the first time in FY24. READ MORE

(With inputs from the agencies.)

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