The glittering world of jewelry stocks experienced a dazzling rally on Tuesday, with leading companies witnessing gains of up to 7% in response to a significant spike in gold prices both domestically and internationally. This surge comes on the heels of escalating tensions in the Middle East due to the Israel-Hamas conflict.
Prominent jewelers including Kalyan Jewellers India Ltd, Tribhovandas Bhimji Zaveri Ltd, Senco Gold Ltd, and Thangamayil Jewelry saw their stock prices shoot up by 5-7% during Tuesday’s trading session.
Gold prices are now hovering near the Rs 58,000 per 10-gram mark as investors flock to the precious metal, considering it a safe haven in times of uncertainty. Internationally, spot gold prices reached one-month highs, reaching approximately $1,850 per ounce.
While a surge in gold prices may initially seem detrimental to jewelry companies, the upcoming festive season in India is expected to keep the industry’s momentum robust.
On Tuesday, Kalyan Jewellers’ stock skyrocketed by as much as 6.7%, reaching a record high of Rs 267.90 per share on the Bombay Stock Exchange (BSE). This surge follows the release of the company’s quarterly business update, which revealed a remarkable 27% growth in consolidated revenue during the September quarter.
Tribhovandas Bhimji Zaveri also surged by 6.8% on Tuesday, hitting an intraday high of Rs 122.60 per share on the BSE. Senco Gold witnessed a substantial spike of 5.6% to reach Rs 640.95, while Thangamayil Jewelry gained 6.7% to reach Rs 1,415.65 per piece, also on the BSE.
Jewelry stocks had already experienced a significant uptick last week following the Reserve Bank of India’s announcement on October 6. The central bank doubled the ceiling for gold loans offered by urban cooperative banks (UCBs) under the bullet repayment scheme, raising it to Rs 4 lakh. This scheme allows borrowers to repay both the principal and interest amounts as a lump sum when the loan tenure concludes.
Experts view this policy change as a boon for jewelry companies, as it is expected to further boost the demand for gold during the upcoming festive season. As consumers look to celebrate and invest in precious metals, jewelry companies are gearing up for a golden opportunity in the weeks ahead.