Realty stocks edge higher after rate cut
DATE: 17/04/2012
HDIL (up 2.76%), Phoenix Mills (up 2%), DLF (up 1.83%), Oberoi Realty (up 1.8%), Unitech (up 1.75%), D B Realty (up 1.4%), Peninsula Land (up 1.38%), Sunteck Realty (up 0.86%), Parsvnath Developers (up 0.76%), Indiabulls Real Estate (up 0.69%) and Godrej Properties (up 0.53%), edged higher.
The BSE Realty index was up 1.44% at 1,807.20. It outperformed the Sensex, which was up 0.55% at 17,245.54.
The Reserve Bank of India (RBI) in its annual monetary policy for 2012-13 on Tuesday slashed the policy rates by 50 basis points. A reduction in interest rate could boost demand for new homes as majority of property deals are driven by finance.
The repo rate, at which banks borrow money from the RBI, now stands at 8% from 8.50% earlier. Similarly, the reverse repo rate, at which RBI borrows money from banks, is now at 7% from 7.50% earlier.
However, the cash reserve ratio (CRR), or the portion of deposits banks keep with the RBI, was left unchanged at 4.75%.
After hiking policy rates for 13 consecutive times between March 2010 and October 2011, the regulator took a pause to support India's falling growth momentum. Since January 2012, RBI slashed the CRR by a combined 125 basis points, but had left rates on hold.
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