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CNX Realty index, a gauge of real estate companies, cracked 10% with Unitech slipping a whopping 45%, or Rs 6.05, to touch its 52-week low level of Rs 8.15 in intra-day trade. By comparison, CNX Nifty was trading lower by 1%, or 117 points, at 8,158 levels.
HDIL (down 16%), Indiabulls Real Estate (down 14% to its 52-week low), Oberoi Realty (down 7%), DLF (down 6.3%), Delta Corp (down 9.2% to its 52-week low) and Prestige Estates (down 2.6%) were some of the other losers.
Adds Mayuresh Joshi, vice - president (institutional), Angel Broking: "The correction seen on Wednesday in real estate stocks is quite brutal. A lot of infrastructure / real estate related companies still have high amount of leverage, compliance issues etc. the fundamental story still remains the same - there are no pre-sales happening, the inventory is still high. Nothing much has changed in the balance sheet. In case there is a transmission of cut in rates, how much of it will translate into more mortgage loans coming through is still doubtful."
Among other interest rate sensitive stocks, Bank Nifty and CNX Auto indices also lost 1% and 2%, respectively. ICICI Bank, State Bank of India (SBI), YES Bank, Axis Bank, Canara Bank and Punjab National Bank (PNB) from the banking pack lost 1.2% - 2.7% till 12:05hours.
While Tata Motors and Amara Raja Batteries lost over 4% in the auto space, Exide Industries, Bosch, Ashok Leyland, TVS Motor, Maruti Suzuki and Bajaj Auto skidded 1% - 3.9%.
Adds Jagannadham Thunuguntla, head of fundamental research at Karvy: "There is some degree of risk averseness in the minds of investors that is playing out. In such a scenario, and given the outlook for interest rates, investors are dumping companies that have high debt."
