|Rally in line with the market trend|
Mumbai, March 25
After being hammered hard during the recent market slump, the BSE Realty index gained the most on Tuesday's market rally. It surged by a whopping 9.48 per cent touching an intra-day high of 7552.38, before closing the day at 7450.
The rally was led by Anant Raj Industries, which advanced 19.60 per cent; DLF Ltd (13.47 per cent), Housing Development and Infrastructure Ltd (13.89 per cent), Unitech Ltd (10.21 per cent) and Parsvnath and Peninsula Land, which were both up more than six per cent.
Analysts say that, since these stocks fell quite a bit in the past one month, investors seem to have done some "bottom picking" today. The realty index has dipped more than 23 per cent in the past month, with many of the stocks touching their 52-week lows, and some of the recently listed ones slipping below their issue price.
"Most of the realty stocks witnessed strong corrections during the recent market fall, with some of them seeing close to 60 per cent correction. They took a bit of a beating, because their valuations were thought to be a little overstretched; also some of the construction activities hadn't met their expected deadlines. Due to this correction, the valuations of these stocks look more attractive to the investors; today there was a lot of short covering and "bottom picking" happening in the realty counter," said Ms Anita Gandhi, Head Institutional Business, Arihant Capital Markets Ltd.
Real estate analysts also say that this rally, in the realty index, is in line with the market trend. "Real estate scrips are high beta stocks, which means that their movement will more or less be in sync with the markets," said a real estate analyst with a brokerage.
Delhi-based developer DLF Ltd was among the hardest hit during the recent market correction, with the stock plunging more than 40 per cent. It was among Tuesday's top gainers on the bourses. "It is no surprise that DLF was one of the frontrunners in today's rally as it had been battered quite a bit earlier. Due to this, the valuations look rather attractive to the investors," said a broker at a domestic stock broking firm