Sensex Slips 350 Points Ahead of RBI Policy; Realty Sector Wants Rate Stability

Indian equity markets opened on a weak note on Thursday as the BSE Sensex declined by 350 points, reflecting cautious investor sentiment ahead of the Reserve Bank of India's (RBI) monetary policy decision. The central bank's policy announcement is scheduled to be made later in the day, and market participants are keenly watching for any change in the repo rate.

The repo rate, the key lending rate at which the RBI provides funds to commercial banks, has a direct bearing on borrowing costs across the economy. A stable repo rate is often seen as supportive for sectors such as real estate, which depend heavily on credit for both construction and home purchases. The RBI's Monetary Policy Committee (MPC), led by Governor Shaktikanta Das, will announce its decision after deliberations. Market participants will be looking for cues on both interest rates and the overall economic outlook.

Adil Altaf, CEO of ANHAD Developers, highlighted the importance of rate stability for developers, saying: "People mostly think about home loan buyers when repo rate news comes up, but there's another side to it — construction finance and land loans, which developers deal with constantly. A steady repo rate actually helps that side just as much. It means builders can stick to their launch and construction timelines without recalculating costs mid-project. It's not the kind of thing that makes headlines, but it keeps the whole chain, land, construction, sales, moving without disruption. At this point, the industry isn't really asking for a cut. Just consistency would do."

Pushpender Singh, Managing Director of JMS Group, commented on the impact in the National Capital Region (NCR), which he described as one of the more active real estate markets this year. "NCR has been one of the more active markets this year, especially stretches like Dwarka Expressway, Golf Course Extension Road, New Gurugram and now Sohna's picking up too. A big part of that is loan rates staying in a comfortable zone. If RBI keeps the repo rate unchanged this week, NCR buyers don't have to rethink their budgets or delay decisions. This region tends to react quicker than most to rate news, so even a pause helps sentiment here. Builders are banking on that too, with a bunch of festive launches coming up. Right now, NCR just needs things to stay predictable, nothing more."

Manik Malik, CEO and President of BPTP, expressed confidence in the housing market's resilience. "The RBI's upcoming policy decision will be closely watched by both homebuyers and the real estate sector. The housing market has remained resilient despite global uncertainties, supported by strong end-user demand, healthy absorption and sustained infrastructure investments. A stable interest rate regime would reinforce buyer sentiment, improve affordability and help maintain the sector's growth trajectory. As India's leading cities continue to witness structural demand, policy stability will remain a key enabler of long-term real estate growth."

Market analysts suggest that the decline in the Sensex may also be attributed to global cues and profit booking, though the primary focus remains on the RBI's stance. The central bank's decision will likely set the tone for markets in the coming sessions. Sectoral indices were mostly in the red, with realty and banking stocks trading lower in early deals.