Realty stocks slide on rate hike concerns

Ten realty stocks fell by 0.04% to 4.52% at 14:54 IST on BSE as a sharp uptick in consumer price inflation raised the likelihood of the central bank hiking its main lending rate viz. the repo rate at a monetary policy review next week.

Indiabulls Real Estate (down 4.52%), HDIL (down 2.81%), DLF (down 2.78%), Peninsula Land (down 2.04%), D B Realty (down 1.74%), Sobha Developers (down 1.31%), Unitech (down 0.96%), Prestige Estates (down 0.58%), Sunteck Realty (down 0.44%) and Phoenix Mills (down 0.04%), edged lower.

The S&P BSE Realty index was down 1.70% at 1,345.34. It underperformed the S&P BSE Sensex, which was down 0.87% at 20742.83

The S&P BSE Realty index had outperformed the market over the past one month till 12 December 2013, rising 6.07% compared with the Sensex's 3.17% rise. The index had also outperformed the market in past one quarter, gaining 6.64% as against Sensex's 5.78% rise.

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

Provisional annual inflation rate based on all India general consumer price index (CPI) (combined) rose 11.24% in November 2013 as compared to 10.17% (final) for the previous month of October 2013. The corresponding provisional inflation rates for rural and urban areas for November 2013 are 11.74% and 10.53% respectively. Inflation rates (final) for rural and urban areas for October 2013 are 10.19% and 10.20% respectively. The data was announced after market hours on Thursday, 12 December 2013.

The government will unveil data on inflation based on the wholesale price index (WPI) for November 2013 on 16 December 2013. WPI is seen easing a bit at 6.9% in November 2013, from 7% in October 2013, as per the median estimate of a poll of economists carried out by Capital Market.

The Reserve Bank of India (RBI) announces next Mid-Quarter Review of Monetary Policy for 2013-14 on 18 December 2013. The Third Quarter Review of Monetary Policy for 2013-14 is scheduled on 28 January 2014.

RBI, after a monetary policy review on 29 October 2013, raised its main lending rate viz. the repo rate by 25 basis points to 7.75%.

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