BSE shares rise
The increase in import duty on precious metals like gold and silver by the Government of India has also affected the BSE shares. On one hand, there was a rise in the commodity market after this decision. On the other hand, a jump of 4 percent was seen in the shares of BSE. On NSE, BSE shares rose by 4 percent and reached a record high of Rs 4 thousand. Even today i.e. on 14th May, its shares rose. But the question here is that if the import duty on gold has increased then why is BSE running so much? Let us try to answer this.
The government has increased the basic customs duty on several categories of gold and silver imports from 5% to 10%. Along with this, Agricultural Infrastructure and Development Cess (AIDC) has also been increased by 5%, taking the total effective import tax to 15%. This step of the government has been taken with the aim of banning the import of precious metals, reducing trade deficit and strengthening the rupee.
After the government’s move came into effect from May 13, gold June futures on MCX rose by 6%, while silver July futures rose by 7%, despite concerns that the increase in import duty would impact retail demand. However, it declined due to profit booking in today’s business.
Why did BSE shares rise?
The sharp increase in import duty on gold and silver did not directly support the BSE share price, as higher gold prices usually increase trading in financial markets. When the government increases import duty, domestic gold and silver prices rise because precious metals coming from outside become expensive. Such sharp fluctuations in prices often attract businessmen and investors who want to profit from market fluctuations. This increases participation in commodity and derivatives markets.
Exchange-related companies generally benefit from higher trading volume in the market because their earnings are directly linked to trading volumes and transaction fees. Therefore, during high volatility in the commodity market, investors remain positive towards stocks like BSE and Multi Commodity Exchange of India. Although MCX gets more direct benefit due to its strong hold in commodity futures trading, but due to increasing participation in the market and strong trading, shares of capital market related companies like BSE can also get support.
Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsha advises its readers and viewers to consult their financial advisors before taking any money-related decisions.
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