A maturing market amid the mayhem
Realty stocks rise in a weak market
A lacklustre day for the market, but a good day for realty stocks.
The BSE real estate index made smart gains of nearly 4.6 percent on Tuesday, a day after the finance minister made additional budget proposals that could benefit the common man.
Pranab Mukherjee proposed a 1 percent interest subsidy on home loans up to one million rupees for one year and tax breaks for developers if they complete real estate projects by March 2012.
Unitech, one of India’s top listed realty firms, gained nearly 9 percent in a weak market and was the top traded stock on the BSE.
The stock has surged in the recent past after dropping to 24 rupees in early March. It closed at 95.75 rupees on Tuesday, translating to a return of nearly 300 percent from the March low.
DLF, India’s largest real estate listed firm, too has done well, registering a rise of 207 percent during the same period.
The stock market meltdown had come down heavily on the real estate index which hit a high of 13,647 on January 14, 2008 and dropped to 1,303 on March 9, 2009, a fall of over 90 percent in absolute terms.
The realty sector often sees volatility and is sensitive to interest rate changes. Do you think investment in such stocks is wise at the current valuations?