Realty shares zoom up to 6% after RBI policy announcement; NIFTY Realty tops sectoral indices

Realty shares rallied up to 6% on Friday, April 5, after the RBI monetary policy panel kept the interest rates unchanged. NIFTY Realty index soared nearly 2% following gains in its constituents to emerge as the biggest gainer among NIFTY sectoral indices.

NIFTY Realty index rose by 1.81% to hit a high of 941.3 as gains in Godrej Properties, DLF, Mahindra Lifespace Developers Limited and Macrotech Developers aided the rally.

The RBI Monetary Policy Committee headed by Governor Shaktikanta Das on Friday decided to keep policy rates unchanged in a 5:1 vote. The central bank for the seventh time has kept policy rates flat which means there would be no change in home and auto loan EMIs for new and existing customers.

As per experts, stable interest rates will ensure growth momentum in housing sales and allow homebuyers to proceed with the purchase decisions. Consistent interest rates also boost consumer confidence and ensure sustainable development in the real estate sector.

Besides, the RBI also maintained the growth and inflation forecast at 7% and 4.5% for the current fiscal. The RBI’s pro-growth stance as the rate-setting panel remained focused on withdrawal of accommodation supported the realty shares. The stance will ensure that inflation progressively aligns to the target.

"The elephant has now gone out for a walk and appears to be returning to the forest. We would like the elephant to return to the forest and remain there on a durable basis. In other words, it is essential, in the best interest of the economy, that CPI inflation continues to moderate and aligns to the target on a durable basis. Till this is achieved, our task remains unfinished," RBI Governor Shaktikanata Das said.

Among major gainers, Mahindra Lifespace Developer rallied up to 6%. Godrej Properties shot up 4.28%, Oberoi Realty up to 2.3%, DLF 2.16%, and Macrotech Developers (Lodha) by 1.88%. Of 20 NIFTY Realty constituents, seven advanced while three, including Sobha Developers and Prestige Estate Projects, declined.

Notably, NIFTY Realty has been the top performer sectoral index in FY 2023-24 shooting up by 132% on impressive growth by real estate companies.