Realty, Housing Finance shares continue to cheer RBI rate cut

Shares of housing finance companies were trading in green in the morning trade. The share price of LIC Housing Finance, Dewan Housing Finance and Gruh Finance jumped 3.10 per cent, 1.37 per cent and 0.97 per cent to Rs 464.45, Rs 218 and Rs 269.85, respectively. (Photo: Reuters)

Real estate shares continued their rally for fifth straight session as the BSE Realty index went up over 2 per cent intra-day on Wednesday. The real estate index gained around 5 per cent in the past four trading session till September 29. The index jumped 1.99 per cent on Tuesday following cut in benchmark lending rates by Reserve Bank of India. The central bank cut repo rate by 50 basis points to 6.75 per cent from 7.25 per cent earlier.

In the morning trade (at 11.10 am), shares of realty majors such Godrej Properties, Oberoi Realty, Ashiana Housing and Prestige Estates were trading 7.34 per cent, 4.20 per cent, 3 per cent and 2.79 per cent up at Rs 328.35, Rs 267.75, Rs 186.90 and Rs 215.80, respectively.

Nirmal Jain, chairman, IIFL Holdings termed the RBI’s decision to cut larger-than-expected as a “game-changing event”. “The RBI has done its bit with a larger cut. The government should accelerate the reforms process now,” Jain said.

Getamber Anand, president, Confederation of Real Estate Developers’ Association of India, said, “The industry is welcoming RBI Governor’s announcement of rate cut by 50 basis points, this was long overdue. Not only in real estate, but across the manufacturing industries and businesses, everyone is feeling encouraged by this announcement.”

Shares of housing finance companies were also trading in green in the morning trade. The share price of LIC Housing Finance, Dewan Housing Finance and Gruh Finance jumped 3.10 per cent, 1.37 per cent and 0.97 per cent to Rs 464.45, Rs 218 and Rs 269.85, respectively.

In the monetary policy on Tuesday, the RBI said that it is proposed to reduce the risk weights applicable to lower value but well collateralised individual housing loans. Currently, the minimum risk weight applicable on individual housing loans is 50 per cent.