Real estate shares drop 20% in early trade amid currency ban fears

Realty stocks plunged up to 20% in early trade on Wednesday with scrips of Unitech and DLF taking a major hit following the government's measures to clamp down on the black money menace.

Deep in the red, S&P BSE Realty index was lower by nearly 11% at 1,314.97 points in the first hour of trading.

In initial trade, Unitech tumbled nearly 20% while DLF dropped over 13% before making a slight recovery.

While Unitech was trading at Rs 4.75, DLF was down at Rs 126.

Among other scrips, Prestige Estates Projects too shed 17% to Rs 153.25, Sobha Developers declined over 11% to Rs 240 and Godrej Properties slumped 7% to Rs 333.

The benchmark 30-share Sensex crashed over 1,500 points in opening trade before making up some of the lost ground but was down by more than 660 points at 26,928.70 points later.

In a major crackdown against black money, Prime Minister Narendra Modi, late on Tuesday, announced that high denomination notes of Rs 500 and Rs 1000 would no longer be legal tender.

While declaring a "decisive" war against black money and corruption, he also came out with a slew of steps to assure commoners that their money is safe. New notes of Rs 2,000 and Rs 500, with completely new design, would be introduced.

According to experts, demonetisation of Rs 1,000 and Rs 500 notes are likely to hit unorganised builders and secondary (resale) property market. Housing prices could witness downward pressure, helping revive demand in this segment which is seeing sluggish trends.