Nifty Realty Falls Nearly 2% As Godrej Properties, Prestige Estates Slide Up To 4%

The Nifty Realty index declined nearly 2% in intraday trade on Friday, with shares of major property developers such as Godrej Properties, Prestige Estates Projects and Lodha Developers falling up to 4%, according to data from the National Stock Exchange (NSE).

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At around 1:15 PM, the Nifty Realty index was down 1.8%, making it one of the worst-performing sectoral indices during the trading session. During the same period, the benchmark Sensex declined about 615 points, or 0.8%, to around 79,400, while the Nifty 50 fell about 165 points to nearly 24,600.

The decline in real estate stocks came as investors remained cautious about inflation risks linked to rising global crude oil prices.

Real Estate Stocks Under Selling Pressure

Among individual stocks in the Nifty Realty index, Godrej Properties declined about 3.8%, emerging as the biggest loser during the session.

Raymond Realty fell nearly 3%, while Prestige Estates Projects declined about 2.7%. Lodha Developers slipped around 2%, and Phoenix Mills dropped close to 2%. Shares of DLF also declined roughly 1.4% in intraday trade.

Most constituents of the realty index traded in negative territory during the session. Only a few stocks managed to record marginal gains, with Sobha and Oberoi Realty trading slightly higher by about 0.3% each, according to NSE data.

Sector Sensitive To Interest Rate Expectations

Real estate companies fall under the category of interest-rate-sensitive stocks, as housing is related to interest rates.

The recent concerns regarding higher crude oil prices have again raised inflationary risks, which might impact interest rate cuts by central banks. This, in turn, might impact sectors such as real estate, which is sensitive to interest rates.

The recent tensions between nations in West Asia have impacted crude oil prices, which might impact inflation.
Realty Index Extends Recent Weak Trend

The decline on Friday adds to the recent weakness in the real estate sector.

Despite recording a rebound of about 1.8% in the previous session, the Nifty Realty index remains down nearly 3% over the past three trading sessions. The index has declined about 4.6% over the last week and nearly 9.8% over the past one month, according to NSE data.

Market volatility also remained elevated during the session. The India VIX index rose about 5.5% to 18.84, reflecting increased caution among investors.

Banking stocks, another segment sensitive to interest rate movements, also traded lower, with the Nifty Bank index declining more than 1% during the session, according to NSE data.