Realty stocks surge as RBI cuts repo rate by 25 basis points

Shares of real estate companies jumped in early trade on Thursday after the Reserve Bank of India surprised the industry and markets alike with an early rate cut.

The central bank announced a 25 basis points cut in repo rate to 7.75 per cent, making its first reduction in a year as inflation showed signs of slowing and the government was making efforts to contain the fiscal deficit.

Reacting to the development, DLF shares jumped 3.1 per cent while Unitech scrip was trading 4.5 per cent higher. Indiabulls Real Estate shares surged 5.2 per cent.

The National Stock Exchange's banking index gained 2.84 per cent.

Traders said a lower interest rate will result in cheaper loans and therefore higher sales for property assets.

Meanwhile, the BSE Sensex was trading at 27,837.23 - up 490.41 points, or 1.79 per cent, from its previous close.

(Reuters)