Jewellery Stocks Slide After PM Modi Urges Citizens To Delay Gold Purchases

Jewellery stocks fell sharply on Monday after Prime Minister Narendra Modi appealed to citizens to postpone gold purchases and avoid non-essential foreign travel for one year to help conserve foreign exchange reserves.

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Titan shares declined 7% in early trade on May 11 after touching a record high in the previous session following its March quarter earnings announcement.

Other jewellery stocks also witnessed selling pressure. Shares of Kalyan Jewellers, Senco Gold and PC Jeweller declined between 5% and 10% during the session.

At around 9:59 a.m., the Sensex was down 1,045.91 points, or 1.35%, at 76,282.28, while the Nifty 50 declined 298.35 points, or 1.23%, to 23,877.80.

The Nifty Consumer Durables index emerged as the worst-performing sectoral index and declined more than 3%.

PM Modi Calls For Lower Gold Consumption

Prime Minister Narendra Modi made the remarks during a public gathering at the Parade Grounds in Hyderabad on Sunday.

The Prime Minister urged citizens to reduce spending on imported products and conserve foreign exchange reserves amid rising global crude oil prices and geopolitical tensions in West Asia.

Modi asked people to postpone gold purchases and non-essential foreign travel for one year. He also encouraged reduced fuel consumption through the use of public transport, carpooling and electric vehicles.

During the speech, Modi said rising crude oil prices had increased the cost of petrol and fertilisers and added pressure on the economy.

Crude Oil Prices And Forex Concerns In Focus

The government’s appeal came at a time when global crude oil prices remained elevated due to the ongoing U.S.-Iran conflict and concerns over supply disruptions in West Asia.

Higher crude oil prices increase India’s import bill and put pressure on foreign exchange reserves because the country imports a large share of its energy requirements.

The rise in gold imports also impacts the current account deficit and increases demand for foreign currency.

Broader Markets Trade Lower

Broader equity markets also traded in negative territory during the session amid weak global cues and continued foreign institutional investor selling.

Market breadth remained weak with 2,459 stocks declining on the exchanges, while 1,065 stocks advanced and 170 remained unchanged.

Investors continued to monitor crude oil prices, foreign capital flows and developments in West Asia as key triggers for domestic markets.