Realty stocks sizzle, banks fizzle
Egged by a cut-rate home loan boost from public sector banks, the realty index on the BSE led stocks from the front, rising 5.5 pc during Monday's trading hours, reports HT Correspondent.business Updated: Dec 15, 2008 21:19 IST
Egged by a cut-rate home loan boost from public sector banks, the realty index on the Bombay Stock Exchange led stocks from the front, rising 5.5 per cent during Monday's trading hours, outperforming the benchmark Sensex that rose 1.5 per cent.
But shares of public sector banks ended flat, with leader State Bank of India losing 0.9 per cent at close. The government is not offering a rate subsidy and analysts expect an erosion of profit margin.
Customers have been encouraged but high property prices may deter them.
“Builders operating at margins of 40 to 50 per cent can cut their prices by 15 per cent to bring in demand for the long-term gain,” said Ajay Parmar, head of research, Emkay Shares and Stock.
“The impact would be small as the loans below Rs 5 lakh are very small in number and for those between Rs 5 and 20 lakh the rate cut is only about 1 percentage point,” said the banking analyst at brokerage Sharekhan.