Shares of seven realty stocks rose 0.35% to 4.71% after the Reserve Bank of India (RBI) on Friday slashed the key repo rate by 75 basis points, to help arrest the economic slowdown in the wake of the coronavirus (Covid-19) outbreak.
Mahindra Lifespace Developers (up 4.71%), Housing Development & Infrastructure (up 4.62%), DLF (up 3.66%), Indiabulls Real Estate (up 3.64%), Sunteck Realty (up 3.61%), Sobha (up 2.54%) and Omaxe (up 0.35%) rose.Meanwhile, Unitech (down 4.48%), Oberoi Realty (down 4.28%),D B Realty (down 2.67%), Godrej Properties (down 2.34%) and The Phoenix Mills (down 0.13%) declined.
The Nifty Realty advanced 3.42% to 192.15 outperforming the Nifty's 0.13% rise to 8,652.75.
On the basis of an assessment of the current and evolving macroeconomic situation, the RBI's Monetary Policy Committee (MPC) at its meeting on Friday (27 March 2020) decided to reduce the policy repo rate under the liquidity adjustment facility (LAF) by 75 basis points to 4.40% from 5.15% with immediate effect. Accordingly, the marginal standing facility (MSF) rate and the Bank Rate stand reduced to 4.65% from 5.40%. Further, consequent upon the widening of the LAF corridor as detailed in the accompanying Statement on Developmental and Regulatory Polices, the reverse repo rate under the LAF stands reduced by 90 basis points to 4%. The MPC also decided to continue with the accommodative stance as long as it is necessary to revive growth and mitigate the impact of coronavirus (COVID-19) on the economy, while ensuring that inflation remains within the target.
Meanwhile, RBI also announced that banks are permitted to allow a three-month moratorium for on payment of EMIs on all term loans that were outstanding on March 1. However, this means that the final decision to provide such a relief is in the hands of the banks.
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