Shares of 13 real estate companies rose by 0.83% to 5.62% at 9:22 IST on BSE after the central bank in a surprise move cut interest rates today, 15 January 2015.
Indiabulls Real Estate (up 5.62%), Oberoi Realty (up 4.70%), Housing Development and Infrastructure (HDIL) (up 4.48%), Unitech (up 4.17%), Sunteck Realty (up 4.05%), DLF (up 3.11%), Anant Raj (up 2.97%), D B Realty (up 2.92%), Godrej Properties (up 2.55%), Prestige Estates (up 2.55%), Sobha (up 2.25%), Peninsula Land (up 0.89%) and Parsvnath Developers (up 0.83%), edged higher.
The S&P BSE Realty index was up 2.97% at 1,536.55. It outperformed the Sensex, which was up 1.53% at 27,764.11.
The Reserve Bank of India cut interest rates before trading hours today, 15 January 2015, by 25 basis points in a surprise inter-meeting cut, yielding to growing signs of slowing inflation and a flagging recovery.
RBI reduced the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 8% to 7.75% with immediate effect. Consequently, the reverse repo rate under the LAF stands adjusted to 6.75%, and the marginal standing facility (MSF) rate and the Bank Rate to 8.75% with immediate effect. It kept the cash reserve ratio (CRR) of scheduled banks unchanged at 4% of net demand and time liabilities (NDTL).
Realty shares are sensitive to interest rate cuts as purchases of both residential and commercial property are largely driven by finance.
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