Current reports show that real estate shares are under heavy pressure of selling. Last Tuesday BSE real estate index was closed at 1,822.14 falling down by 3 %.
Real estate shares are under heavy pressure to sell off mainly because of profit-booking. Real estate investors’ sentiment was all the more hurt by the 7.8 % inflation of September. This was the highest in all the ten months of the year.
The 3% of fall of real estate shares was the highest among all the sectors. The shares of all real estate majors also affected heavily. DLF shares were sold at Rs.208 with a decline of 4.3%. Another real estate major Unitech fell to Rs.25.65 after facing a decline of 4.8 %.
The biggest real estate loser was Anant Raj Industries which dropped by 6.8%. HDIL had the second worst position as it had a drop by 5.7%.
Many of the investors are cutting off their real estate shares as there is no sign of any immediate recovery. Mr. Deven Choksey, MD of KR Choksey Securities said that the recovery is possible only if the interest rate is lowered. He added that the economy also should do well.
Beating the Sensex, the BSE real estate index had risen 22 % in September in which the Sensex achieved a 7.6% of growth.
Stock investors are again flowing back to technology or defensive stocks. They show a negative sentiment towards the real estate stocks. Banking sector and other capital goods sectors also face negative sentiment.
S P Tulsian, an independent stock market analyst, said that the real estate stocks might improve by 5% from the current levels. He cautioned that some individual- stocks might fall deeper.
DB Realty remained an exception to this. This was the sole real estate stock which bounced 5% upward to reach Rs.103.65. This jump was mainly because Rare Enterprises of Rakesh Jhunjhunwala had bought 1.25 million DB real estate shares.
Stock experts have already warned the investors to purchase real estate shares cautiously. They predict that the shares would not be as profitable as it used to be.