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Shares in real estate firms drop

November 26, 2010

A labourer works at a construction site in the northern Indian city Lucknow February 7, 2006. REUTERS/Pawan Kumar/Files

Shares of real estate developers came under pressure on Thursday following the arrest of top public sector bankers the previous evening on corruption charges.

The CBI on Wednesday arrested five officials from state-run listed companies, including the chief executive of LIC Housing Finance, for taking bribes to facilitate large corporate loans.

The BSE Realty Index closed 5.4 pct down, with DB Realty, HDIL and Unitech dropping 10 pct, 9.7 pct and 6 pct respectively.

The realty sector has been underperforming since the Reserve Bank of India raised rates earlier this month, and the graft scandal has further dampened sentiments.

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