Shares of nine real estate companies fell by 0.72% to 3.69% at 11:36 IST on BSE after the RBI slashed the policy repo rate by 25 basis points and hiked reverse repo rate by 25 basis points in its monetary policy review today, 5 April 2016.
The Reserve Bank of India (RBI) announced its first bi-monthly monetary policy during market hours today, 5 April 2016.Indiabulls Real Estate (down 3.69%), DLF (down 2.02%), Unitech (down 2.51%), Orbit Corporation (down 1.48%), Oberoi Realty (down 1.95%), D B Realty (down 0.87%), Prestige Estates Projects (down 0.72%), Housing Development and Infrastructure (HDIL) (down 2.96%), Sobha (down 1.01%) edged lower. Godrej Properties rose 0.87%.
The BSE Realty index was down 1.36% at 1,239.97. It underperformed the Sensex, which was down 0.97% at 25,154.07
The BSE Realty index had outperformed the market over the past one month till 4 April 2016, rising 7.71% compared with Sensex's 3.06% rise. The index, however, underperformed the market in past one quarter, falling 6.41% as against Sensex's 0.87% fall.
On the basis of an assessment of the current and evolving macroeconomic situation, the RBI has decided to reduce the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points (bps) from 6.75% to 6.5%. It has reduced the minimum daily maintenance of the cash reserve ratio (CRR) from 95% of the requirement to 90% with effect from the fortnight beginning 16 April 2016, while keeping the CRR unchanged at 4% of net demand and time liabilities (NDTL). The RBI has narrowed the policy rate corridor from +/-100 basis points (bps) to +/- 50 bps by reducing the marginal standing facility (MSF) rate by 75 basis points and increasing the reverse repo rate by 25 basis points, with a view to ensuring finer alignment of the weighted average call rate (WACR) with the repo rate. Consequently, the reverse repo rate under the LAF stands adjusted to 6% and the MSF rate to 7%. The bank rate which is aligned to the MSF rate also stands adjusted to 7%, RBI added.
Purchases of both residential and commercial property are largely driven by finance.
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