Select jewellery stocks saw a sharp rise in their prices on Thursday amid intense speculation that government trading company MMTC may offload a large quantity of gold soon. Centre’s gold monetisation scheme has mobilised around seven tonnes of gold so far. A stronger rupee also boosted the sentiment, as it would be cheaper to import gold.
PC Jeweller was the biggest gainer at 8.04 per cent, followed by Tribhovandas Bhimji Javeri (TBZ) 5.63 per cent, Tara Jewels 3.20 per cent, Thangamayil Jewellery 2.74 per cent, Gitanjali Gems 2.66 per cent, Reniassance Jewellery 1.71 per cent and Titan 0.71 per cent
The jewellers can now get gold locally with MMTC offloading the metal, while imports attract 10 per cent duty besides currency conversion charges, said AP Shukla, president at Joindre Capital Services. A stronger rupee vis-à-vis the dollar will bring down the cost of inbound shipments, he added.
The domestic currency is trading at 16-month high of 65.41 against the greenback. The rupee is the third best Asian currency after Thai won and Taiwanese dollar.
Gold prices in Mumbai have, meanwhile, eased from Rs 30,440 per 10 gram (24 carat) on February 25, 2017 to Rs 29,000 per 10 gram on March 16.
Jewellery stocks, which were battered during demonetisation, have staged impressive comeback since beginning of the year, thanks to a good wedding season sale and export orders. Fast remonetisation has also helped, analysts said..
The jewellery stocks had traded lower after Diwali buying in October of 2016. The demonetisation triggered further erosion between November 8 and late December.
“The rise in jewellery stocks is due to several factors that have been at play recently. The wedding season sales went well, which is a major reason, exports order was also completed during January and we had good export orders. Also, there was marginal impact of demonetisation on liquidity going away, though people are now also buying jewellery through cheque and carda,” said Praveenshankar Pandya, chairman, Gems & Jewellery Export Promotion Council.
Shares of top 10 jewellery stocks by market capitalisation rose 5-35 per cent between January 1 and March 15, Capitaline data showed.
In the first half of March, Tribhovan Das Zaveri, Gitanjali Gems, and Renaissance Jewellery saw profit booking after a good run on the bourses. Others like Titan Company, Rajesh Exports, PC Jeweller saw further gains.
raviranjan@mydigitalfc.com
