Sobha, DLF, other real estate shares rise up to 6% on optimism over Fed rate cut

Sobha, DLF, other real estate shares rise up to 6% on optimism over Fed rate cut.

Shares of real estate firms rallied up to 6 percent in Wednesday’s trade amid optimism that the US Federal Reserve may go for further rate cuts later this year.

The Nifty Realty index rose over 3 percent, recovering from the previous day’s losses, as investors cheered comments from Fed Chair Jerome Powell indicating possible monetary easing.

"Fed Chair Jerome Powell warned that the sharp slowdown in hiring is increasingly threatening the US economy, hinting at the possibility of two more rate cuts this year," Jigar Trivedi, Senior Research Analyst at Reliance Securities told PTI.

Expectations of lower US interest rates tend to improve global liquidity and risk sentiment, often leading to increased foreign inflows into emerging markets like India. There are also expectations that India's central bank, Reserve Bank of India (RBI), may take a cue from US Fed and go for a rate cut.

India's annual retail inflation also slowed to an eight-year low of 1.54 percent in September, leaving room for the RBI to cut rates one more time when it meets in December.

All 10 constituents of the Nifty Realty index were trading in the green.

The rally was led by Sobha Ltd, which climbed more than 6 per cent, followed by Prestige Estates Projects and Lodha Developers, which gained around 4 per cent each. DLF and Anant Raj were among the other major gainers, advancing up to 3 per cent.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.