Stocks of jewellery companies rallied on Tuesday (October 10) amid a spike in gold prices at both global and domestic levels after the Israel-Hamas conflict.

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Leading jewellers such as Kalyan Jewellers India Ltd, Tribhovandas Bhimji Zaveri Ltd, Senco Gold Ltd and Thangamayil Jewellery saw their share prices shoot up by 5-7 percent in trade on Tuesday.

Gold prices are hovering near Rs 58,000 per 10gm levels after investors rushed to invest in the yellow metal as it’s considered as a safe haven. Internationally, spot gold prices rose to their one-month highs at around $1,850 per ounce levels.

Though a jump in gold prices is not good news for jewellery companies as it may hamper their sales, the upcoming festive season across the country is expected to keep the business momentum going.

On Tuesday, the Kalyan Jewellers stock rose as much as 6.7 percent to hit a record high of Rs 267.90 per share on BSE. The stock has seen a sharp rally this week after the company’s quarterly business update showed 27 percent revenue growth on a consolidated basis during the September quarter.

Tribhovandas Bhimji Zaveri also jumped as much as 6.8 percent on Tuesday to hit an intra-day high of Rs 122.60 per share on BSE.

Senco Gold spiked as much as 5.6 percent to Rs 640.95, while Thangamayil Jewellery gained 6.7 percent to Rs 1,415.65 per piece on BSE.

Jewellery stocks saw a sharp rally last week as well after the Reserve Bank of India on October 6 doubled the ceiling for gold loans for urban cooperative banks (UCBs) under the bullet repayment scheme to Rs 4 lakh.

The bullet repayment scheme lets borrowers repay both the principal and interest amounts on a loan as a lump sum when the loan tenure ends.

Experts see the latest policy development as a positive for jewellery companies as it may boost demand for gold further during the upcoming festive season.

First Published:Oct 10, 2023 1:29 PM IST