Heard on the street- Red light still on in realty street

With the BSE Realty Index gaining 2% in a lacklustre market, real estate stocks, for the second consecutive session, were the star performers of the day. On Wednesday, the index rose by 12%.

Brokers, however, caution that it is not yet time for bargain hunting at these counters, many of which are down over 80% from their record highs seen less than a year back. Wednesday���s rally was attributed to covering of short-positions by traders more than anything else.

The economic stimulus package, announced by the government last week, was somewhat a let-down for the sector, as there were no direct policy measures that would have benefited real estate companies. Expectations were that banks would be allowed to restructure loans given to real estate companies. In the meantime, property firms continue to grapple with a high cost of borrowing and a slump in demand. That being the case, institutional investors are unlikely to change their bearish outlook on the sector unless there are some signs of stability.