Realty, power, banking indices bear the brunt

Bears prevailed on realty, power and banking stocks on the Bombay Stock Exchange (BSE), thereby pulling down the Sensex below the crucial 16,000 mark today "" the lowest since September 18.

The realty stocks were down after investors anticipated that a fall in real estate prices would hit the operating margins of property developers this year, said analysts.

They were of the view that mounting domestic and global liquidity crises could affect the property prices in the near future.

"Already, there are no major land deals taking place after the stock market crashed from its peak in January this year as developers seem to be going slow on expansion plans due to liquidity crunch. If the bearish sentiment continues for a couple of months more, then one can see severe fall in real-estate prices," said Joy Sanyal, head, strategic development at Jones Lang LaSalle Meghraj, a renowned property consultancy firm.

The BSE Realty index fell the most today by 6.64 per cent to close at 7,782. The index has declined by 44 per cent from its January 8 peak, while the key benchmark BSE Sensex has shed nearly 25 per cent.

According to investment advisor S P Tulsian, the fall in the stock markets has had a domino effect on the realty prices.

"Normally, the demand for big houses in hype areas comes from top stock brokers, diamond merchants and the likes. However, they too are caught off-guard by the stock market crash and, therefore, there seems no enquiry for residential property coming from them. This may force developers to compromise on prices," Tulsian said.

The stock of realty major DLF was down 3.47 per cent to close at Rs 657.70 on BSE today. Top loser on the Realty Index was Ansal Infrastructure, which fell by 13.25 per cent at Rs 165.65. HDIL slipped by 12.93 per cent at Rs 618.45. Other stocks declined in the range of 3-10 per cent.

Further, a pessimistic investor sentiment took its toll on power and banking stocks, which were among the worst hit apart from realty.

The Power Index on BSE was down by 5.57 per cent at 3,155, while the Bankex fell 4.92 per cent to close at 8,477. Both the Power Index and Bankex fell by 36 and 33 per cent from their peaks in January this year.

The BSE Power Index suffered the most due to sharp declines in Reliance Energy and Reliance Power.

Reliance Energy was down by 12.98 per cent at Rs 1,270, while Reliance Power fell by 10.11 per cent at Rs 338. Both the counters shed nearly 50 per cent of their gains since January.

Other losers on the Power Index today included GVK Power (down 10.89 per cent at Rs 36), Torrent Power (down 10.35 per cent at Rs 116.50) and Tata Power (down 5.09 per cent at Rs 1,136).