Shares of 11 realty firms rose by 0.27% to 3.65% at 12:05 IST on BSE as the Reserve Bank of India after its monetary policy meeting today, 7 August 2019, cut the policy repo rate by 35 basis points to 5.75% with immediate effect.

The S&P BSE realty index was up 0.09%. It outperformed the BSE Sensex, which was down 0.18% at 36,910.28.

Lower interest rates may help revive demand for properties. Purchases of both residential and commercial property are largely driven by finance.

Prestige Estates Projects (up 3.65%), Housing Development and Infrastructure (HDIL) (up 3.42%), Mahindra Lifespace Developers (up 2.48%), Phoenix Mills (up 1.91%), Anant Raj (up 1.89%), Sobha (up 1.67%), Godrej Properties (up 1.05%), Unitech (up 1.05%), Omaxe (up 0.56%), Oberoi Realty (up 0.37%) and DLF (up 0.27%) advanced.

Sunteck Realty (down 1.4%), Parsvnath Developers (down 1.99%), Peninsula Land (down 2.3%), D B Realty (down 2.93%) and Indiabulls Real Estate (down 9.96%) declined.

On the basis of an assessment of the current and evolving macroeconomic situation, the Reserve Bank of India's monetary policy committee (MPC) decided to reduce the policy repo rate under the liquidity adjustment facility (LAF) by 35 basis points (bps) from 5.75% to 5.40% with immediate effect.

Consequently, the reverse repo rate under the LAF stands revised to 5.15%, and the marginal standing facility (MSF) rate and the bank rate to 5.65%.

The MPC also decided to maintain the accommodative stance of monetary policy. These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2%, while supporting growth.

The next meeting of the MPC is scheduled during 1, 3 and 4 October 2019.

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