Housing, construction stocks gain as RBI, PM talk growth

Realty sector stocks today got a boost despite a poor show by major realtors after the Reserve Bank of India on Saturday announced a cut its main short-term lending rate to infuse fresh liquidity into the financial system.

The market was also encouraged by statements issued by prime minister Manmohan Singh that the government would take all necessary steps to boost industrial production with a specific focus on reviving the housing and construction sectors.

The government will take all necessary monetary and fiscal steps to protect economic growth as the global financial crisis is likely to be more severe and prolonged, the prime minister said.

Manmohan Singh, who met top businessmen to get their views on how to tackle the impact of the global credit crunch on the domestic economy, has assured industry that the government will take all steps to boost industrial production, particularly revival of housing and construction sectors.

The BSE realty sector index rebounded 158.61 points, or 6.50 per cent, at 2,136.85, with almost all stocks ending in positive territory.

Akruti City, DLF Ltd, Unitech and Parsvnath stocks recovered sharply and the realty sector index was the second-best performer, after the banking sector.

Ansal Infra, Indiabull Realty, Omax, Sobha Developers, Parsvnath all gained as trading sentiment turned better after the RBI slashed key interest rates to infuse more liquidity into the banking system and ease credit.

(See: Crisis offers an opportunity for growth for India: PM)