Contrary to expectations from several quarters real estate shares have begun to show a high. According to three dealers involved with real estate stocks the real estate index which was down last week after falling sharply was up by nearly 5%. After this rise on bargain buying trading was high on shares owned by real estate developers. A local brokerage analyst commented that when the Reserve Bank of India (RBI) had increased interest rates it affected the exposure of the real estate sector due to paucity of funds thereby keeping prospective investors on tenterhook. Interest rates were raised by a quarter of a percentage point by RBI last week. This was the seventh increase in interest rates in less than a year. A resurgent inflation prompted RBI to take this decision.
The realty index which was up by 1.02% was considered as a benchmark but this record was outperformed when the BSE realty index went up to 3.99%. Sources from the stock exchange revealed that this increase in realty index increased the shares of several real estate players of the country. Most notable amongst these were that of DLF, Unitech, Housing Development and Infrastructure and Indiabulls Real Estate which witnessed their shares go up by 3-7%.
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