Real estate stocks fall on IT sector worries; Nifty Realty index down 1.5%, ‘Best is behind us’, says expert
Read Time:2 Minute, 47 Second
The sell-off in realty shares comes alongside a sharp decline in IT stocks, which have been hit by fears of artificial intelligence-led disruption after recent claims by Anthropic on automating legacy software modernisation.
- Nifty Realty index fell 1.42 percent as all stocks traded in red
- IT sector weakness fuels concerns for real estate demand
- Top losers: Signature Global, Prestige Group, Godrej Properties
Real estate stocks came under pressure around noon on Tuesday, tracking broader weakness in equity markets as mounting uncertainty around the IT sector weighed on sentiment. The Nifty Realty index fell 1.42 percent, with all 10 constituents trading in the red, amid concerns that sustained stress in information technology stocks could spill over into real estate demand and valuations.
The sell-off in realty shares comes alongside a sharp decline in IT stocks, which have been hit by fears of artificial intelligence-led disruption. Anthropic has claimed that its AI tools could sharply reduce the cost and complexity of modernising legacy software systems — an area critical to traditional IT services firms. The IT sector has been the worst-performing pocket in recent sessions, heightening risk aversion across linked sectors.
Within the Nifty Realty index, Signature Global stock was the top loser, down 2.9 percent at Rs 956.65. Prestige Group fell 2.7 percent to Rs 1,448.1, while Godrej Properties slipped 1.9 percent to Rs 1,795.6. Lodha Group declined 1.6 percent to Rs 1,055.3.
Other stocks in the index also traded lower. Anant Raj dropped 1.4 percent, Brigade Enterprises fell 1.3 percent, and index heavyweight DLF was down 1.1 percent at Rs 619.4. Sobha, The Phoenix Mills and Oberoi Realty also traded lower, though losses were relatively contained.
As for the Nifty Realty itself, the index has lost 3.6 percent in one week and is down 8.4 percent so far this year.
- Also read | Nifty IT index crashes over 4% as Anthropic’s AI claims fuel disruption fears; TCS, Infosys among top losers
Market participants pointed to concerns that prolonged weakness in IT stocks — driven by fears of structural changes to the sector’s business model — could eventually weigh on commercial real estate demand and urban housing sentiment, given the sector’s historical linkage with technology-driven employment and office absorption.
Commenting on the sector, Murtuza Arsiwalla of Kotak Institutional Equities said on CNBC-TV18 that the Street is increasingly cautious on real estate amid uncertainties surrounding the IT sector. He said the best phase for the real estate sector may already be behind it, although individual companies could still perform well.
Arsiwalla added that realty stocks are currently pricing in almost no near-term growth, reflecting subdued expectations. He noted that while REITs may continue to deliver reasonable returns, these are likely to be lower than those seen over the past two years. According to him, value opportunities at this stage lie largely in the residential segment and in select contrarian plays rather than a broad-based sector re-rating.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Happy
0 %
Sad
0 %
Excited
0 %
Sleepy
0 %
Angry
0 %
Surprise
0 %
0
0
Average Rating