Real estate stocks deliver rocket returns this week as BSE Realty eclipses sectoral peers with 10% rally

The realty sector eclipsed its sectoral peers as the BSE Realty index delivered near double-digit weekly gains with significant impetus coming from the Reserve Bank of India’s (RBI’s) 50 bps points repo rate cut on Friday, unleashing the property stocks.

The 10-stock index ended the week with 9.7% returns while rising by 5% on Friday.

Among the stocks that rallied most, Sobha’s 18% uptick towered over others. Prestige Estates Projects and Brigade Enterprises were up 17%, each.

Others like the DLF, Godrej Properties, Macrotech Developers (Lodha), Signatureglobal (India), The Phoenix Mills and Anant Raj closed with weekly gains of 10% and 3%.

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Others including BSE Financial Services (1.8%), BSE Metal (1.7%), BSE Auto (1.5%) and BSE Healthcare (1.4%) trailed significantly. The headline index BSE Sensex closed with 1% uptick.

Among major laggards were BSE Information Technology and BSE Capital Goods, which were down 0.15% and 0.41%, respectively, on a weekly basis.

The broader markets also showed good momentum with the BSE Smallcap rising by 2% during the week while the BSE Midcap gain by nearly as much.

Realty, which is an interest rate sensitive sector is expected to benefit from the rate cut. RBI has so far cut the policy rate by 100 bps, bringing it to 5.5%. This was a third cut in a row and under the leadership of Governor Sanjay Malhotra who took over the reins from Shaktikanta Das.

While the EMIs of potential home buyers will likely come down, the industry will also benefit from cheaper cost of funds.

Commenting on the development, Krishna Appala, Fund Manager, Capitalmind PMS said that rate-sensitive sectors stand to benefit — especially financials, real estate, and manufacturing, though she conceded that the transmission could be slower, given muted credit offtake.

“Despite abundant liquidity, both corporate borrowing and bank lending remain subdued,” Appala said, adding that overall, this policy reinforces India’s macro stability while attempting to reignite demand in a measured, credible way.

Also Read: Bank, NBFC stocks cheer RBI’s 50 bps bonanza, but are rate cuts delivering?

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