Realty stocks worst hit in market fall

The Bombay Stock Exchange's Realty Index posted its second biggest fall ever as analysts predicted a down cycle in property rates in the near term. It was the biggest casualty among sector-specific indices in Thursday's market crash.

The BSE Realty Index declined by 11.59 per cent even while the benchmark Sensex fell by 4.78 per cent on Thursday.

The domestic realty major DLF Ltd. was the top loser among the frontline stocks. The stock was down by 14.87 per cent 606.75.

With this, the stock has lost 50 per cent of its value from its 52-week high of Rs 1,225 on January 15 this year.

The index, meanwhile, has gone down by 46 per cent from its peak of January 8. The Sensex fell by 26 per cent from its peak.

A recent report by Merrill Lynch pointed out that residential sales in New Delhi have started falling even while office property market was strong.

Analysts also argue that prolonged market turbulence could hit the property rates over all.

"None of the big ticket deals in the real estate sectors are taking place currently, which is one of the reason why realty stocks could be hit," said an analyst at a leading real estate consulting firm.

The stock of Indiabulls real estate, the fourth-biggest developer by market value, was down by 13.02 per cent at Rs 494 as Goldman Sachs analysts Vishnu Gopal and Shruti Gandhi issued a "sell" rating on the stock in a note to clients.

The brokerage initiated coverage. Visibility on a number of Indiabulls' initiatives is low and it does not have a track record in retail and residential development,'' Goldman said in a note to clients.

Among others, HDIL was down 13 per cent at Rs 616, Unitech Ltd down 9.71 per cent at Rs 265.95, Parsvnath Developers fell 8.23 per cent at Rs 207.50 and Omaxe was down 7.77 per cent at Rs 205.

A host of other small realty company stocks were down in the range of 1-9 per cent.

Other major sector-specific losers were BSE Metal Index (down 8.1 per cent), BSE Consumer Durable Index (down 7.83 per cent), BSE Power Index (down 6.28 per cent), BSE PSU Index (down 5.90 per cent) and BSE Bankex Index (down 5.59 per cent).