Real estate shares plunge, NIFTY Realty index snaps two-day winning streak on profit booking

Shares of real estate companies were trading lower on Monday, December 8, on account of profit booking after the Reserve Bank of India (RBI) cut repo rate by 25 basis points to a three-year low of 5.25% on Friday. NIFTY Realty index snapped its two-day winning streak and the index dropped as much as 4% to hit an intraday low of 857.

The index surged for two straight sessions ahead of RBI's Monetary Policy Committee on Friday and rose as much as 0.88% in the two trading sessions ahead of the credit policy meeting.

All the 10 shares in the NIFTY Realty index were trading lower dragged down by Godrej Properties' 3.74% decline. Prestige Estates, Anant Raj, DLF, Sobha, Macrotech Developers, Brigade Enterprises and Oberoi Realty also dropped between 1.87%-3.68%.

RB' MPC led by Governor Sanjay Malhotra, in its latest monetary policy meeting (Dec 3 to Dec 5), unanimously decided to reduce the repo rate by 25 basis points to 5.25%, its lowest level in three years, with immediate effect.

With Friday’s cut, the rate-setting panel has delivered a cumulative 125 basis points repo rate cut in the ongoing financial year.

Friday’s rate cut came after the MPC maintained a pause in cuts in the last two policy meetings.

The MPC unanimously decided to cut the repo rate and maintained its neutral stance on the back of lower inflation and the strong growth the Indian economy witnessed during the second quarter of the current financial year.

Governor Malhotra noted that the Indian economy witnessed rapid disinflation, and the inflation target dropped below its lower tolerance band for the first time since the RBI was mandated with the task of inflation targeting.

As of 3:01 pm, NIFTY Realty index traded 3.54% lower and was the top sectoral loser on the National Stock Exchange.