Nifty Realty soars 4% on easing oil prices; Phoenix Mills, DLF gain upto 5%

Real estate stocks: Realty stocks were leading the gains today, driven by easing oil prices amid signs of de-escalation of West Asia tensions. The Nifty Realty index surged nearly 4 per cent, hitting a high of 700.65.

 

As of 10:30 AM, the Nifty Realty was the top performing sectoral index as it traded 3.4 per cent higher at 696.40. A broad-based buying was seen, with all the 10 constituents trading in the green.

 

Individually, The Phoenix Mills gained 5 per cent, followed by Signatureglobal, Oberoi Realty, Anant Raj and DLF, up in the range of 3 to 4 per cent.

 

 

The Nifty Realty index was hit hard over the past few weeks, crashing 15 per cent due to rising oil prices amid supply disruption fears, leaving investors jittery about the rate-cut cycle.

 

Analyst said that the geopolitical stability is important for the policy rates to go down, which in return attracts capital inflows in sectors like real estate, thus driving the market sentiment.

 

Gaurav Sharma of Globe Capital Market said that the buying in realty stocks is mainly in line with the broader market rally. Realty is a highly rate-sensitive sector, and rate hikes due to elevated inflation have a direct impact on both buyers and developers.

 

"If oil prices sustain at higher levels, the government might increase fuel prices. If that happens, inflation will rise, which could derail the government’s plan to reduce interest rates. Conversely, if interest rates rise, it could negatively impact the real estate sector," he said.

 

"Low interest rates are positive for the sector, but rising rates combined with high inflation are negative," the analyst said, adding that he maintains a cautious view on the real estate sector for now.  Notably, crude oil prices have slipped below the $100 per barrel mark, reflecting sustained market optimism around a breakthrough in the Iran war. 

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