Synopsis : Jewellery stocks witnessed a sharp sell-off on Monday after Prime Minister Narendra Modi urged citizens to avoid non-essential gold purchases to help conserve India's foreign exchange reserves. Investors reacted strongly to fears of weakening demand in the jewellery sector amid rising economic uncertainty and elevated crude oil prices.
Shares of jewellery companies declined sharply during Monday's trading session after Prime Minister Narendra Modi appealed to citizens to reduce non-essential gold purchases over the next year in order to help preserve India's foreign exchange reserves.
The comments triggered heavy selling across jewellery counters, with investors worried that lower consumer demand could impact revenue growth for gold and jewellery retailers.
Senco Gold emerged among the biggest losers, falling 8.69% or 31 points to Rs 333 on the BSE. Kalyan Jewellers also dropped sharply, declining 8.3% to Rs 389 during intraday trade.
Titan Company shares slipped 6.45% or 291 points to trade at Rs 4,222, while PC Jeweller declined 3.26% to Rs 9.
The sharp correction came after PM Modi, during a public rally on Sunday, urged citizens to help reduce pressure on India's foreign exchange reserves by avoiding unnecessary overseas travel, foreign weddings and non-essential gold purchases. He also encouraged domestic tourism and local spending.
The market interpreted the remarks as a possible signal that demand for discretionary luxury products, especially gold jewellery, could face pressure in the coming months.
The broader market also traded under pressure amid rising geopolitical tensions, elevated crude oil prices and concerns surrounding foreign exchange conservation.
The BSE Sensex fell 927 points to 76,400, while the Nifty 50 declined over 259 points to trade below the 24,000 mark.
Market expert Ajay Bagga said concerns over rising energy costs and foreign exchange outflows are becoming increasingly important for investors. He noted that expectations of fuel price hikes are rising as oil marketing companies continue facing losses due to elevated crude prices.
Bagga also highlighted growing global uncertainty surrounding the US-Iran conflict and its possible implications for financial markets. According to him, investors are currently balancing strong global AI-driven market momentum against rising geopolitical risks.
Meanwhile, economists said that while India's domestic economy remains relatively resilient, higher oil prices and supply-chain disruptions continue to create inflationary risks.
Sujan Hajra, Chief Economist at Anand Rathi, said that concerns around crude oil and the Strait of Hormuz remain key risks for global markets. He added that rising energy prices are making growth more expensive and could complicate the outlook for interest rates globally.
Despite the sharp correction in jewellery stocks, analysts believe the long-term outlook for organised jewellery retailers may still remain intact due to continued formalisation of the sector, rising branded jewellery demand and expanding retail networks.
However, in the near term, volatility may continue as investors closely track gold prices, consumer demand trends and geopolitical developments affecting commodity markets.
Disclaimer : This article is for informational and educational purposes only and should not be considered financial or investment advice. Investors should consult certified financial advisors before making investment decisions.
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