Jewellery Stocks Plummet Following PM Modi's Gold Buying Advisory
Jewellery stocks tank up to 9% on PM Modi's remark
The Economic TimesImage: The Economic Times
Shares of gold jewellery companies in Mumbai dropped sharply by up to 9% after Prime Minister Narendra Modi advised citizens to avoid purchasing gold for the next year to protect foreign exchange reserves. Despite this, analysts believe that long-term demand driven by weddings and festivals will remain strong.
- 01Jewellery stocks fell between 7.5% and 9.2% following PM Modi's remarks.
- 02The Nifty and Sensex indices fell by 1.5-1.7% during the same period.
- 03Analysts expect near-term sentiment to remain weak but long-term demand to be robust.
- 04Gold prices remained stable at ₹1,52,136 per 10 grams, down 0.3%.
- 05The sector outlook for FY27 is strong, with potential buying opportunities during dips.
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Shares of gold jewellery companies in Mumbai experienced a significant decline of up to 9% on Monday after Prime Minister Narendra Modi urged citizens to avoid buying gold for the next year to help protect foreign exchange reserves. Major companies such as Kalyan Jewellers and Tribhovandas Bhimji Zaveri saw their stock prices drop between 7.5% and 9.2%, contrasting with the 1.5-1.7% decline in the Nifty and Sensex indices. Analysts, including Harsh Thakkar from Samco Securities, noted that while the government's stance may dampen near-term investor sentiment, it is unlikely to affect overall demand, which has been healthy across the sector. Gold prices remained relatively stable, closing at ₹1,52,136 per 10 grams, down 0.3%. Despite the current challenges, experts like Sunny Agrawal from SBI Securities believe that the underlying consumption trends will remain intact, especially with the upcoming wedding season. The sector outlook for FY27 remains strong, with analysts suggesting that any dips in stock prices could present good buying opportunities.
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The decline in jewellery stocks may affect investor confidence and market sentiment, potentially impacting future investments in the sector.
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