Realty shares decline after RBI monetary policy

Shares of seven real estate companies fell by 0.36% to 1.79% at 11:36 IST on BSE after the Reserve Bank of India kept key rates unchanged in its monetary policy review today, 2 February 2016.

Parsvnath Developers (down 1.79%), Oberoi Realty (down 1.23%), Indiabulls Real Estate (down 0.36%), DLF (down 1.12%), Unitech (down 0.77%), Orbit Corporation (down 1.23%) and Prestige Estates Projects (down 1.31%) edged lower. Housing Development and Infrastructure (HDIL) (up 0.76%), Sobha (up 2.81%), Godrej Properties (up 1.27%) and D B Realty (up 0.39%) rose.

The BSE Realty index was up 0.08% at 1,212.41. It outperformed the Sensex, which was down 0.11% at 24,773.18

The BSE Realty index had underperformed the market over the past one month till 1 February 2016, sliding 11.64% compared with 5.11% decline in the Sensex. The index had also underperformed the market in past one quarter, declining 11.68% as against Sensex's 6.87% fall.

Purchases of both residential and commercial property are largely driven by finance.

The Reserve Bank of India (RBI) in its sixth bi-monthly monetary policy review today, 2 February 2016, kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.75%. Consequently, the reverse repo rate under the LAF remained unchanged at 5.75%, and the marginal standing facility (MSF) rate and the bank rate at 7.75%. RBI kept the cash reserve ratio (CRR) of scheduled banks unchanged at 4% of net demand and time liability (NDTL).

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