Parsvnath Developers (down 3.36%), Ackruti City (down 1.83%), Unitech (down 2.92%), Omaxe (down 2.94%), DLF (down 2.86%), Indiabulls Real Estate (down 5.81%) and Housing Development & Infrastructure (down 4.66%) edged lower.
The BSE Realty index lost 3.25% to 3,232.10 and was the top loser among the sectoral indices on the BSE. It underperformed the Sensex, which was down 0.60% at 17,471.93.
The Reserve Bank of India (RBI) after market hours on Friday 19 March 2010 unexpectedly raised interest rates from record-low levels, citing intensifying inflationary pressures and a steady economic recovery.
The RBI raised the repo rate, the rate at which it lends to banks to 5% from 4.75% and reverse repo rate, the rate which it absorbs funds from the system to 3.50% from 3.25% with immediate effect.
Realty stocks being rate sensitive dropped on worries rise in interest rates will impact demand and thereby hit profitability. The central bank's move to hike key policy rates before its 20 April 2010 policy review caught markets by surprise.
India's wholesale price index accelerated to 9.89% in February, the highest since October 2008 and well above the central bank's end-March projection of 8.5% and the 8.56% January reading.