DLF, Unitech Gain as India Cuts Rates, Plans Spending

DLF Ltd. and Unitech Ltd., India's biggest developers, rose in Mumbai after the central bank cut its key rate for the third time in two months and the government lowered taxes and increased spending as part of a plan to lift an economy shaken by terrorist attacks and a global recession. DLF rose 7.2 percent to 218.15 rupees at 10:11 a.m. in local trading, trimming its loss this year to 80 percent. Unitech, the third-worst performer on the Realty Index this year, gained 8.6 percent to 33.4 rupees, its highest in more than two weeks. The government said yesterday it plans to allocate an extra 200 billion rupees ($4 billion) as part of a total 3 trillion rupees spending plan for the rest of the financial year, to boost the economy. The Reserve Bank of India said Saturday it will cut the repurchase rate to 6.5 percent from 7.5 percent after industrial activity and demand for credit slowed. ``There is evidence of economic activity slowing down,'' the RBI said on Saturday. ``The services sector, too, which has been our prime growth engine for the last five years, is slowing, mainly in construction, transport and communication, trade, hotels and restaurants.'' The central bank also promised to set aside an additional 40 billion rupees ($813 million) for mortgage lenders. The government said yesterday state-run banks will announce a relief package for mortgage borrowers of up to 2 million rupees. The Bombay Stock Exchange's Realty Index tracking 14 companies has declined 86 percent this year.