Shares of most real estate companies extended their gains on Monday, with the Nifty Realty index rising for the fifth consecutive session amid easing concerns over interest rate hikes by the US Federal Reserve.
The Nifty Realty index climbed as much as 2 percent during the session and has gained over 10.5 percent since June 30. Over the five-session rally, the sectoral index has advanced about 11 per cent, making it the top performer among sectoral indices.
Buying interest in realty stocks strengthened after a softer-than-expected US jobs report last week eased expectations of further rate hikes by the Federal Reserve.
According to the CME FedWatch tool, traders now see about a 55 per cent chance of a rate hike in September, down from more than 60 per cent before the jobs data.
Lower expectations of US rate hikes generally improve global risk sentiment and support capital flows into emerging markets such as India. The real estate sector also tends to benefit as stable interest rate expectations reduce concerns over borrowing costs, which are a key factor for both developers and homebuyers.
Ajit Mishra, Senior Vice-President, Research, Religare Broking, said, "We are seeing short-term reversal in the realty space, after spending almost two years in corrective phase. The entire rate-sensitive pack, viz. banking, auto and realty, is witnessing buying interest and we expect the prevailing tone to continue. However, participants should stay selective, citing the scheduled earnings season, which may result in stock-specific volatility."
Among individual stocks, shares of Lodha Developers rose over 3 per cent to emerge as the top gainer in the index. Godrej Properties, Phoenix Mills, Oberoi Realty and Prestige Estates Projects gained 2.1-2.7 per cent.
Shares of Oberoi Realty extended gains for the sixth straight session after the company reported gross bookings of Rs 8,109 crore for its residential project Three Sixty North in Gurugram.
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