Realty trails a roaring market
Dalal Street came back from the Diwali-Balipratipada break with a bang on Wednesday, but property stocks were left behind. The Sensex jumped about 1,300 points, or 1.6%, to nearly 82,410, and the Nifty gained about 330 points to 25,376, a gap-up open of almost 300 points. Crude oil fell to about $89 a barrel as tensions in West Asia eased, and foreign investors have put in about $5.68 billion this month, lifting the Nifty and Sensex nearly 9% in November.
The Nifty Realty index opened at 895.75, slightly below Monday’s close of 897.70, and was up only 0.38% at 901 by 9:20 AM, against gains of 1.2% to 1.3% in the benchmarks. That is a pause rather than a reversal. The index has climbed about 10% from 814 on October 30 and is now near its 52-week high of about 952.
How the stocks have moved
The rally has been broad. Godrej Properties, which fell nearly 5% to ₹1,490 on its results day on October 23, trades near ₹1,822. DLF, at ₹691 on October 30, is near ₹753. After a run like that, profit-taking is natural, and some money appears to be rotating into banks, autos and PSU lenders, which led today’s open.
Housing finance stocks: the other side of the home loan story
Listed housing finance companies, which lend to the same buyers developers are trying to attract, have had a more mixed run, though a firm financial sector helps them today. LIC Housing Finance reported an 11% rise in second-quarter profit to ₹1,509 crore, with disbursements up 11% on the year and a loan book of ₹3.26 lakh crore. Its shares reached about ₹529 on November 6 after five straight gains, though they remain down about 8.6% over a year and trade at only around five times earnings. The company has raised its lending rates by 25 basis points, a sign that the RBI’s October hike is reaching borrowers. Aadhar Housing Finance hit a 52-week low of ₹414 on November 2 before recovering to about ₹433 after posting a profit of ₹308 crore. Both stocks will be sensitive to tomorrow’s inflation data.
What to look for through the day
The Nifty has reached the 25,350 to 25,800 resistance band, with support at 25,000 and 24,800. About 1,000 points separate it from its 52-week high of 26,373. For realty, watch whether the index holds above 900 and whether volumes stay strong on dips. India VIX, the fear gauge, rose about 1% to 17.7, and US inflation worries and weakness in the Nasdaq are a reminder that global risks remain.
What is moving realty stocks
- Cheaper crude: Oil has fallen from about $118 in late October to about $89, easing inflation and rate worries.
- Foreign flows: Steady FPI buying has supported the large developers.
- Interest rates: The RBI’s repo rate is 5.50%, so home loan EMIs remain a concern for buyers.
- Earnings: Lodha’s profit rose 28% to ₹1,013 crore and Brigade’s 29% to ₹219 crore, while Godrej Properties’ profit fell 62% despite record collections.
What to wait for
- India inflation data: October retail inflation is due tomorrow, with forecasts of about 5.9% to 6.1%, against 5.54% in September and the RBI’s 6% ceiling. A high reading would dent hopes of lower rates.
- Diwali sales data: Developers’ booking and launch updates will show whether homebuyers returned after a 21% drop in bookings in April to June.
- Remaining Q2 results: A few developers are yet to report, with November 14 the last day.
- Next RBI meeting: It is scheduled for December 2 to 4.
The outlook
Realty has had a strong run and is taking a breather while the broader market sprints. The sector needs benign inflation numbers and festive sales data to keep climbing.
Also Read: Realty Stocks Steady Before Navratri as Market Shakes Off Rate Hike Shock
