Six realty shares declined by 0.26% to 2.67% at 14:30 IST on BSE, extending recent fall as the Reserve Bank of India, in a surprise decision, raised its key policy rate after a monetary policy review on Friday, 20 September 2013.
The BSE Realty index was down 0.99% to 1,215.43. It underperformed the BSE Sensex which was down 0.91%, to 19,738.75. The BSE Realty index had declined 6.53% to 1,287.12 on Friday, 20 September 2013. The index lost 4.33% to 1,231.38 on Monday, 23 September 2013. It fell 0.31% to 1,227.56 on Tuesday, 24 September 2013.
DLF (down 2.67%), Oberoi Realty (down 1.41%), D B Realty (down 1.23%), Unitech (down 1.2%), Parsvnath Developers (down 0.57%) declined. Indiabulls Real Estate rose 0.63%. Housing Development & Infrastructure (HDIL) gained 3.01%.
Omaxe declined 0.26%. Constellation Capital, Kautilya Monetary Services and S. A. Finvest which form part of the promoters and members of the promoter group of Omaxe have decided to collectively sell a total of 1.52 crore shares, representing 8.79% of the total paid up equity share capital of the company, via Offer for Sale (OFS) through a separate window provided by the BSE for this purpose. The OFS will take place on Friday, 27 September 2013.
The BSE Realty index underperformed the market over the past one month till 24 September 2013, rising 0.33% compared with the Sensex's 7.56% gain. The index had also underperformed the market in the past one quarter, sliding 14.65% as against Sensex's 7.44% rise.
Most real estate stocks fell for fourth day in a row on worries higher interest rates may dent demand for residential and commercial property. Purchases of both residential and commercial property are largely driven by finance.
The Reserve Bank of India, in a surprise decision, raised its key policy rate viz. the repo rate by 25 basis points (bps) to 7.5% from 7.25% after a monetary policy review on Friday, 20 September 2013, and as the central bank retained hawkish tone at the latest monetary policy review.
Dr. Raghuram G. Rajan, Governor, Reserve Bank of India, said in a statement on Friday, 20 September 2013, that the calibrated withdrawal of the exceptional measures that the RBI had taken since mid-July to tighten liquidity with a view to dampening volatility in the foreign exchange market will provide a boost to growth, reduce the financing distortions that are emerging in the market and reduce the strain on corporate and bank balance sheets. In an attempt to tame high inflation, which is partly fueled by the currency's recent slump against the dollar, the RBI raised its policy rate viz. the repo rate after a monetary policy review on Friday, 20 September 2013. The central bank, however, eased some of the liquidity-tightening measures it had taken to prop up the rupee. The RBI reduced the rate at which it lends funds to banks through its marginal standing facility, by three quarters of a percentage point, to 9.5%. The marginal standing facility is an emergency funding facility for banks. On net, the RBI's latest measures will reduce the cost of bank financing substantially while allowing the RBI to take an appropriately precautionary stance on inflation, Dr. Rajan said on Friday, 20 September 2013.
The minimum daily maintenance of the CRR prescribed by the Reserve Bank of India (RBI) has been brought down from 99% of the requirement to 95% from the fortnight beginning 21 September 2013. The timing and direction of further actions on exceptional measures will be contingent upon exchange market stability, and can be two-way, the RBI said after a monetary policy review. However, any further change in the minimum daily maintenance of the CRR is not contemplated, the RBI said. The RBI kept the cash reserve ratio (CRR) unchanged at 4%.
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