After Prime Minister Modi’s appeal not to buy gold for 1 year, there was a huge fall in the shares of jewelery companies. Shares of Titan, Kalyan Jewelers and Senco Gold fell 6% to 10%. This appeal has been made in view of the declining foreign exchange reserves.
After an appeal by Prime Minister Narendra Modi, there was a stir in the shares of jewelery companies in the stock market. PM Modi has appealed to people to avoid buying gold for weddings for a year. As soon as this news came, the shares of Titan, one of the country’s largest jewelery companies, fell by more than 6% during trading today. Not only Titan, but shares of companies like Kalyan Jewelers and Senco Gold also saw a decline of up to 10%.
What happened in the market?
Citing the global economic crisis and the country’s declining foreign exchange reserves, the Prime Minister requested people to exercise restraint in buying gold. After this appeal, fear spread among investors that there could be a huge decline in the demand for gold. Due to this fear, investors started selling shares of jewelery companies in a hurry. Shares of Kalyan Jewelers fell by about 8%. At one point, Titan shares had fallen 6.28% to Rs 4,230. The biggest loss was suffered by Senco Gold, whose shares fell by almost 9%.
Economic reasons behind Prime Minister’s words
The main reasons behind this appeal of the Prime Minister are the rising prices of crude oil and the decreasing foreign exchange reserves. India imports both gold and crude oil in US dollars. When the purchase of gold in the country increases, the dollar reserves decrease rapidly. This has a direct impact on the value of the Indian rupee and the rupee becomes weak. Fuel prices are expected to increase in the coming times due to tensions in West Asia and blockages in the Strait of Hormuz. In view of this, Modi has appealed to reduce the use of fuel and postpone the plan of buying gold for a year. According to data, in the financial year 2026, India is importing an average of 60 tonnes of gold every month, on which the country has to spend about 6 billion dollars.
Shares fell despite profits
Interestingly, this decline has come when these companies were earning good profits. Titan had reported a profit of Rs 1,179 crore in the March quarter. At the same time, the profit of Kalyan Jewelers had doubled to Rs 409.5 crore. Despite this, there is now concern in the market that due to the Prime Minister’s appeal, gold sales may decline in the coming wedding season.