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http://www.indianexpress.com/news/realty-check-on-dstreet;-sensex-down-182-pts/716750/0
Realty check on D-Street; Sensex down 182 pts
ENS Economic Bureau Tags : National Stock Exchange, Nifty, LIC Housing, Housing Loan Scam Posted: Sat Nov 27 2010, 01:31 hrs Mumbai:
With real estate stocks getting a re-rating in the wake of the bribe-for-loan scam, the benchmark Sensex slumped below the crucial 19,000-level in intra-day trading before closing with a loss of about 182 points as the housing loan scam continued to hammer realty stocks.
The Sensex started the day on a firm note but soon lost ground in a highly choppy trade, and finally settled at 19,136.61, shedding 181.55 points or 0.94 per cent from previous close.
The National Stock Exchange's broad-based Nifty also tanked by 47.80 points to finish at 5,751.95. The Sensex had tumbled by 555 points in the last three days after the surfacing the loan scam on Wednesday. "The multi-crore scam could have a adverse impact on property prices, as lenders could tighten the norms for giving loans to realty players," said an analyst on the sustained fall in realty stocks.
Avinash Gupta, vice president, Bonanza Portfolio, said, "The market is confused as to what is going to be the impact of the probe undertaken by the CBI. There was also confusion on the names of companies going to come under the scanner of the investigating agencies. The weakness in small and madcap stocks was highly pronounced. The market feels that the cost of funds for the real estate sector would go up. There are also apprehensions that the availability of the credit for the sector would go down. These apprehensions caused the stocks of the sector to fall."
"For the third day running, the loan scam continued to take a heavy toll on the Indian market as concerns about its impact on property prices sent realty shares into a tailspin. However, the banking index recovered from the session lows and IT shares bucked the negative trend," said Amar Ambani, head of research, IIFL.
LIC Housing which is in the midst of the scam fell by another 11.91 per cent to Rs 932.10. Money Matters Financial Services — whose chairman Rajesh Sharma is in CBI custody for his alleged involvement in the loan scam — fell by another 10 per cent to Rs 382.55. Among real estate shares, Ackruti plunged by 13.38 per cent, DB Realty 10 per cent, Indiabull Real Estate 11.88 per cent, Orbit 13.08 per cent and Unitech 4.76 per cent. Jai Prakash Associates settled at Rs 105.75 with a loss of 8.04 per cent. The counter emerged as the worst performer among the 30 Sensex scrips. Another realty giant DLF too witnessed a plunge of 1.71 per cent to close at Rs 287.75.
Analysts said apprehensions that banks would cut lending to the realty sector after the surfacing of the scam led to the selling pressure. There's also talk of real estate prices falling in the wake of the margin squeeze.
Though the Government said it has not directed public sector banks to cut exposure in real estate following the housing-finance bribery scam, investors were not convinced. Financial Services Secretary R Gopalan had denied that the government has given directions on cutting lending to realty companies by state-run banks.
A host of factors like crisis in Ireland and South Korea, interest rate hike in China, and a string of scams including 2G spectrum row and housing loan racket, have seen the Sensex plummet by 896 points or 4.47 per cent so far this month. The continuous fall is an over-reaction to the negative news and also called it a buying opportunity for the investors.
Realty check on D-Street; Sensex down 182 pts
ENS Economic Bureau Tags : National Stock Exchange, Nifty, LIC Housing, Housing Loan Scam Posted: Sat Nov 27 2010, 01:31 hrs Mumbai:
With real estate stocks getting a re-rating in the wake of the bribe-for-loan scam, the benchmark Sensex slumped below the crucial 19,000-level in intra-day trading before closing with a loss of about 182 points as the housing loan scam continued to hammer realty stocks.
The Sensex started the day on a firm note but soon lost ground in a highly choppy trade, and finally settled at 19,136.61, shedding 181.55 points or 0.94 per cent from previous close.
The National Stock Exchange's broad-based Nifty also tanked by 47.80 points to finish at 5,751.95. The Sensex had tumbled by 555 points in the last three days after the surfacing the loan scam on Wednesday. "The multi-crore scam could have a adverse impact on property prices, as lenders could tighten the norms for giving loans to realty players," said an analyst on the sustained fall in realty stocks.
Avinash Gupta, vice president, Bonanza Portfolio, said, "The market is confused as to what is going to be the impact of the probe undertaken by the CBI. There was also confusion on the names of companies going to come under the scanner of the investigating agencies. The weakness in small and madcap stocks was highly pronounced. The market feels that the cost of funds for the real estate sector would go up. There are also apprehensions that the availability of the credit for the sector would go down. These apprehensions caused the stocks of the sector to fall."
"For the third day running, the loan scam continued to take a heavy toll on the Indian market as concerns about its impact on property prices sent realty shares into a tailspin. However, the banking index recovered from the session lows and IT shares bucked the negative trend," said Amar Ambani, head of research, IIFL.
LIC Housing which is in the midst of the scam fell by another 11.91 per cent to Rs 932.10. Money Matters Financial Services — whose chairman Rajesh Sharma is in CBI custody for his alleged involvement in the loan scam — fell by another 10 per cent to Rs 382.55. Among real estate shares, Ackruti plunged by 13.38 per cent, DB Realty 10 per cent, Indiabull Real Estate 11.88 per cent, Orbit 13.08 per cent and Unitech 4.76 per cent. Jai Prakash Associates settled at Rs 105.75 with a loss of 8.04 per cent. The counter emerged as the worst performer among the 30 Sensex scrips. Another realty giant DLF too witnessed a plunge of 1.71 per cent to close at Rs 287.75.
Analysts said apprehensions that banks would cut lending to the realty sector after the surfacing of the scam led to the selling pressure. There's also talk of real estate prices falling in the wake of the margin squeeze.
Though the Government said it has not directed public sector banks to cut exposure in real estate following the housing-finance bribery scam, investors were not convinced. Financial Services Secretary R Gopalan had denied that the government has given directions on cutting lending to realty companies by state-run banks.
A host of factors like crisis in Ireland and South Korea, interest rate hike in China, and a string of scams including 2G spectrum row and housing loan racket, have seen the Sensex plummet by 896 points or 4.47 per cent so far this month. The continuous fall is an over-reaction to the negative news and also called it a buying opportunity for the investors.