Shares of 14 real estate companies rose by 0.02% to 3.78% at 9:36 IST on BSE after the Reserve Bank of India reduced key rates by 25 basis points before trading hours today, 4 March 2015.
Indiabulls Real Estate (up 3.78%), DLF (up 3.27%), Unitech (up 3%), Housing Development and Infrastructure (HDIL) (up 2.68%), Anant Raj (up 2.17%), Oberoi Realty (up 1.88%), Sobha (up 1.31%), Phoenix Mills (up 1.25%), Godrej Properties (up 1.02%), Sunteck Realty (up 1.02%), D B Realty (up 0.85%), Parsvnath Developers (up 0.83%), Peninsula Land (up 0.59%) and Prestige Estates (up 0.02%), edged higher.
The BSE Realty index was up 2.24% at 1,835.14. It outperformed the Sensex, which was up 0.99% at 29,886.87.
The BSE Realty index had underperformed the market over the past one month till 3 March 2015, rising 0.29% compared with 2.05% rise in the Sensex. The index had, however, outperformed the market in past one quarter, rising 5.83% as against Sensex's 4.05% rise.
The Reserve Bank of India (RBI) reduced the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 7.75% to 7.5% with immediate effect. Consequently, the reverse repo rate under the LAF stands adjusted to 6.5%, and the marginal standing facility (MSF) rate and the Bank Rate to 8.5% with immediate effect.
Realty shares are sensitive to interest rate cuts as purchases of both residential and commercial property are largely driven by finance.
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