Indiabulls Real Estate (down 6.27%), HDIL (down 5.21%), Unitech (down 4.69%), DLF (down 4.62%), Oberoi Realty (down 4.48%), Peninsula Land (down 3.45%), Anant Raj (down 3.41%), Prestige Estates (down 2.62%), Godrej Properties (down 2.53%), Sobha Developers (down 1.73%), Sunteck Realty (down 0.80%), Phoenix Mills (down 0.75%) and D B Realty (down 0.36%), edged lower.
The S&P BSE Realty index was down 3.72% at 1,490.05. It underperformed the S&P BSE Sensex, which was down 1.16% at 19,802.27.
The S&P BSE Realty index had underperformed the market over the past one month till 15 July 2013, sliding 3.40% compared with the Sensex's 4.47% rise. The index had underperformed the market in past one quarter, falling 14.18% as against Sensex's 9.13% rise.
Tight liquidity affects the realty sector adversely as purchases of both residential and commercial property are largely driven by finance.
The central bank after market hours on Monday, 15 July 2013, announced that the Marginal Standing Facility (MSF) rate is re-calibrated with immediate effect to be 300 basis points above the policy repo rate under the Liquidity Adjustment Facility (LAF). Consequently, the MSF rate will now be 10.25%. Accordingly, the Bank Rate also stands adjusted to 10.25% with immediate effect. The overall allocation of funds under the LAF will be limited to 1% of the Net Demand and Time Liabilities (NDTL) of the banking system, reckoned as Rs 75000 crore for this purpose, the Reserve Bank of India (RBI) said. The allocation to individual banks will be made in proportion to their bids, subject to the overall ceiling, it said. This change in LAF will come into effect from Wednesday, 17 July 2013.
The RBI also said that it will conduct Open Market Sales of Government of India Securities of Rs 12000 crore on Thursday, 18 July 2013. The RBI said it will continue to closely monitor the markets, the liquidity situation and the macroeconomic developments and will take such other measures as may be necessary, consistent with the growth-inflation dynamics and macroeconomic stability.
The RBI said the market perception of likely tapering of US quantitative easing has triggered outflows of portfolio investment, particularly from the debt segment. Consequently, the rupee has depreciated markedly in the last six weeks. Countries with large current account deficits, such as India, have been particularly affected despite their relatively promising economic fundamentals. The exchange rate pressure also evidences that the demand for foreign currency has increased vis-a-vis that of the rupee in part because of the improving domestic liquidity situation.
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