Shares of several major jewellery companies fell sharply on Monday after Prime Minister Narendra Modi reportedly urged citizens to avoid buying gold for the next one year to help strengthen India’s foreign exchange reserves.
The remarks triggered heavy selling pressure across the jewellery sector, with investors fearing a possible slowdown in gold demand and retail jewellery sales in the coming months.
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Among the biggest losers were Senco Gold, Kalyan Jewellers and PC Jeweller, while several other jewellery-related stocks also witnessed steep declines during the trading session.
Jewellery stocks slide amid concerns over falling gold demand
During Monday’s session, shares of Kalyan Jewellers India dropped 8.3 percent, while Titan Company fell 6.3 percent. Senco Gold declined 10.7 percent, while Sky Gold plunged 12.2 percent. Shares of PC Jeweller slipped 5 percent, PN Gadgil Jewellers fell 7 percent, and Tribhovandas Bhimji Zaveri Ltd declined 6.3 percent.
Market experts said the decline was linked to fears that reduced consumer interest in gold purchases could hurt jewellery sales and impact the earnings outlook of major companies in the sector.
The broader concern stems from rising geopolitical tensions in West Asia, which have already pushed up crude oil prices and weakened the Indian rupee against the US dollar.
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As gold imports become more expensive due to currency pressure, reducing domestic demand for gold could help limit foreign exchange outflow and ease pressure on reserves. Investors, however, appeared worried that any prolonged slowdown in gold buying may directly affect the growth prospects of listed jewellery companies.
The broader stock market also remained under pressure during the session. By around 1:20 pm, the BSE Sensex was down nearly 884 points, while the NIFTY 50 slipped around 235 points.
