Nifty Realty index crashes 4% to hit over 2-month low; Godrej Properties, Lodha lead losses: Here’s why

New business data points to the fact that Nifty Realty index crashed 4% to hit over two-month low on September 11 amid broad-based selloff in markets.

Godrej Properties, Lodha Developers, Prestige Estates led the losses in the sectoral index by falling 6.2%, 6% and 4.6%, respectively.

At 9:56 am on September 11, Nifty Realty index was trading 4.36% softer at 834.

Other losers in the sectoral index are Oberoi Realty, DLF, which declined 4.24% and 3.83%, respectively.

The decline in real estate shares comes as US producer-price-inflation data published Thursday revealed renewed pressure from rising energy prices last month, potentially adding to the case for a Fed interest-rate gain the week ahead.

Bonds came under further pressure after the US Treasury bought back fewer securities than market participants had anticipated, pushing 10-year yields to the cusp of 5%.

Rising crude prices inflamed inflation risks and sent global bond yields to new highs, weighing on equities.

The Fed jitters additionally led Nifty Metal softer by 2.7%.

"Financial markets are adjusting to a stronger probability of monetary tightening, with federal funds futures indicating a greater than 70% chance of a interest-rate gain the week ahead," stated Devarsh Vakil, head of prime research at HDFC Securities.

Indian government bonds additionally plunged in opening deals on Friday, with the benchmark 10-year bond yield surpassing 7% to a more than three-month high as a combination of rising crude prices and elevated U.S. yields hurt investor sentiment.

Traders await US consumer price index data for further clues on the The US central bank's policy path. The US inflation report is due at 1230 GMT.

"A stronger-than-anticipated reading would reinforce the case for several interest rate increases, potentially pushing Treasury yields and the dollar elevated and placing additional pressure on gold," stated Wael Makarem, financial markets strategists lead, Exness.