Seven realty shares declined by 1.15% to 8.88% at 11:15 IST on BSE after the Reserve Bank of India hiked the repo rate by 25 basis points to 7.5% at its mid-quarter monetary policy review today, 20 September 2013.
The BSE Realty index lost 5.83% to 1296.79. It underperformed the BSE Sensex which was down 2.46%, to 20,138.30.
Orbit Corp (down 1.15%), Housing Development & Infrastructure (HDIL) (down 6.18%), Indiabulls Real Estate (down 8.88%), Unitech (down 6.52%), Sobha Developers (down 3.19%), DLF (down 6.3%), and Oberoi Realty (down 2.3%), dropped in volatile trade.
Real estate stocks fell 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 new RBI governor Raghuram Rajan announced hike in repo rate, the key short-term policy rate, rate by 25 basis points to 7.5% with immediate effect at its mid-quarter monetary policy review today, 20 September 2013.
The central bank also revised the Marginal Standing Facility, the rate at which banks access funds for emergency needs, by 75 basis points to 9.5%. It also reduced minimum daily maintenance of the cash reserve ratio (CRR) from 99% of the requirement to 95%.
However, the cash reserve ratio, or the portion of deposits banks have to maintain with the central bank, was kept unchanged at 4%.
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