Realty Index Slips on Inflation Concerns
The Indian real estate sector witnessed a significant downturn last week, with the realty index plummeting 4.45% amidst growing concerns over rising inflation. This decline sparked fears among realtors of an imminent hike in housing loan rates.
Market Performance
- The Bombay Stock Exchange's (BSE) benchmark index hit a nearly nine-month low.
- The realty sector index suffered a substantial loss of 250.79 points, closing at 5383.81 after touching a low of 5349.80 points.
Key Players Affected
- DLF Ltd: Stocks fell by Rs 21.82, closing at Rs 456.35.
- Housing Development Finance Corp (HDFC): Shares declined by Rs 53.35, ending the week at Rs 528.15.
- Akruti City: Shares witnessed a significant decline of nearly 8%, closing at Rs 790.10.
- Shobha Developers: Stocks fell by Rs 25.75, ending the week at Rs 360.95.
- Indiabulls Real Estate: Shares declined 5.91%, closing at Rs 354.05.
Market Analysts' Insights
According to marketmen, the primary driver of this downturn is the soaring rate of inflation, which touched a 13-year high of 11.05%. This surge is anticipated to force bankers and lenders to increase interest rates on housing loans, potentially leading to a negative impact on real estate sales.