Anant Raj Industries (down 7.5%), DB Realty (down 6.71%), Prestige Estates (down 6.58%), DLF (down 6.46%), Unitech (down 6.34%), Indiabulls Real Estate (down 5.61%), HDIL (down 5.47%), Peninsula Land (down 4.95%), Oberoi Realty (down 4.4%), Phoenix Mills (down 1.29%), Godrej Properties (down 1.28%), Sobha Developers (down 1.1%) and Parsvnath Developers (down 0.66%), edged lower.
The BSE Realty index was down 5.33% at 2,054.30. It underperformed the Sensex, which was down 1.39% at 18,173.15.
The BSE Realty index rose 14.97% in the preceding six sessions to 2,169.96 on 21 February 2012 from a recent low of 1,887.49 on 10 February 2012. From a recent low of 1,370.23 on 2 January 2012, the BSE Realty index jumped 58.36% to 2,169.96 on 21 February 2012.
The BSE Realty index had outperformed the market over the past one month until 21 February 2012, rising 27.06% compared with the Sensexs 10.09% rise. The index had also outperformed the market in past one quarter, spurting 39.26% as against 15.57% rise in the Sensex.
The recent rise in shares of interest rate sensitive real estate firms was triggered by a further decline in headline inflation in January 2012, which reinforced expectations that the central bank will start cutting interest rates in the coming months to revive slowing economic growth.
The wholesale price index (WPI) rose a slower-than-expected 6.55% in January 2012 from 7.47% rise in December 2011, government data showed early last week. The annual reading for November 2011 was revised upwards to 9.46% from 9.11% reported earlier.
The government said on Tuesday (21 February 2012) that inflation based on the consumer price index (CPI) rose 7.65% in January 2012. The annual CPI data released for the first time on Tuesday measures retail prices in major food groups, fuel, clothing, housing and education across rural and urban India. The new CPI price series is gradually expected to displace wholesale price data as the primary indicator of inflationary trends.
Lower interest rates augur well for real estate developers as purchases of both residential and commercial property are largely driven by finance.
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