GST rate cut fuels real estate stock rally at Dalal Street
The bull-run witnessed in the real estate stocks is mainly caused by the recent slash in GST rates being levied on the under construction and affordable house category, say experts.
On account of the GST Council's decision to slash rates on under construction houses from 12 per cent to 1 per cent and from 8 per cent to 1 per cent in affordable housing category, the real state stocks have been witnessing huge buying since the opening of the Monday intraday trade. The BSE realty index had added more than two per cent in the early morning session but finally, the index went through some profit booking but still, the index is above half a per cent above its Friday close. The market experts are of the opinion that the rally is due to the recent GST council's decision to cut rates but there are some stocks that may continue to rally in short-term to mid-term perspective.
Speaking about the rally witnessed in real estate stocks on Monday Simi Bhaumik, a SEBI registered technical equity analyst told Zee Business, "Technically, the rally witnessed in real estate stocks is mainly due to the GST Council's decision to slash rates on under construction houses and the affordable houses. So, the markets can expect some rally in real estate stocks due to this reason, however, there are some stocks like Oberoi Realty and Godrej Properties that may continue to sustain this bull run in short-term and mid-term perspective."
See Zee Business video below:
— Zee Business (@ZeeBusiness) February 25, 2019
Asked about the future outlook of Oberoi Realty and Godrej Properties Simi Bhaumik told, "Oberoi Realty and Godrej Properties are technically looking strong in short-term to mid-term perspective and it can be a good stock to buy if an investor is looking for an investment option in the stock market." She said that an investor can take a buy position in the Oberoi Realty for the target of Rs 540 to Rs 550 per stock levels while in Godrej Property stock the target would be around Rs 790 to Rs 800 per stock levels. However, she advised investors to main a stop loss of Rs 490/counter in Oberoi Realty and Rs 700/shares in Godrej Properties.
Earlier on Friday, IndiaNivesh research team too had speculated some bull run into the real estate raw material stocks with special mention of some stocks like JSW Steel, SAIL and Hindalco counters.