Rate cut hopes fuel rally in realty, bank stocks

Mumbai: Realty and banking stocks were in demand Friday, surging up to 19 percent, on renewed hopes of a cut in interest rates by the Reserve Bank.

Shares of Mahindra Lifespace Developers zoomed 19.25 percent, Ashiana Housing surged 7.37 percent, HDIL climbed 6.58 percent, Godrej Properties (5.17 percent), Indiabulls Real Estate (3.55 percent) and Unitech rose 3.37 percent on the BSE.

Besides, the BSE realty index rose by 3.16 percent to settle at 1,336.79.

From the banking space, Axis Bank rose by 4.70 percent, Federal Bank gained 4.47 per cent, Bank of Baroda was up 4.38 per cent, Kotak Mahindra Bank (2.76 per cent), State Bank of India (2.41 percent), HDFC Bank (2.33 percent) and ICICI Bank rose by 1.89 percent.
The BSE banking index gained 2.66 per cent to 19,952.94.

Brokers say the Fed's move and domestic disinflationary pressures provide a good opportunity to the RBI to provide support to India's subdued economic growth with a rate cut.

"Rate sensitive sectors like banking, auto and realty remained in action today as investors have now started building up hopes of a repo-rate cut in the next policy review on September 29 as the big risk of run down on currency is abated," said Vijay Singhania, Founder-Director, Trade Smart Online.

In the broader market, the BSE Sensex ended 254.94 points up at 26,218.91.