India's benchmark equity index Sensex on Thursday opened at fresh record high, while Nifty topped the 12000 mark as investors cheered the government's booster to revive stalled housing projects.
At 9.25am, the Sensex rose 0.42% to 40640.25 points while Nifty advanced 0.41% to 12015 points.
The government on Wednesday approved a plan to set up a ₹25,000 crore alternative investment fund (AIF) to revive stalled housing projects, as it seeks to provide relief to distressed homebuyers and rekindle animal spirits in the ailing realty sector.
"We welcome these changes and feel that this will help create greater momentum in stock movement. There are many projects which are near completion but have not been able to garner last mile funds will benefit from this move. This step will definitely create greater confidence and credibility and may, in due course, encourage private segments to extend their support in last mile funding, helping the beleaguered sector to go over this period of slowdown," said Shishir Baijal, chairman & managing director, Knight Frank India.
Realty and housing finance companies surged on the government’s announcement. Indiabulls Real Estate jumped 5%, Sobha Ltd gained 3.7%, Prestige Estate rose 3.5%, Oberoi Realty climbed 2.3%, DLF was up 2.2%, and Godrej Properties was 1.8% higher.
Real estate companies which are into affordable housing projects also gained. NBCC soared 14.7%, Edelweiss Financial Services Ltd and Piramal Enterprises Ltd gained 5% each, L&T Finance jumped 5.8%, and JM Financial rose 3%.
Housing finance companies such as HDFC, LIC Housing Finance, GIC Housing Finance and Repco Home Finance rose 2-5%.
"This provided relief to developers with unfinished projects as also ensuring delivery of homes to buyers," said Niranjan Hiranandani, president (National), NAREDCO and MD, Hiranandani Group. “Positive impact of the move include generation of employment, revival of demand for cement, iron and steel industries and relieve stress in other major sectors of the economy."
Lupin Ltd fell 3.5% after the company reported a surprise loss of ₹127 crore hit by one-time loss of ₹546 crore.