Titan, Kalyan Jewellers Fall 4% After PM Modi Calls for Lower Gold Consumption to Save Forex
Shares of top jewellery retailers plummeted on Monday after Prime Minister Narendra Modi urged Indians to postpone non-essential gold buying to help stabilize the economy. Speaking in Hyderabad, the PM linked gold conservation to national strength amid rising global oil prices. Following the remarks, Titan Company fell 3.2%, and Kalyan Jewellers dropped 4.5%, as analysts warned of a sharp decline in volumes during the peak wedding season.
- Republic Business
- 2 min read
The sentiment on Dalal Street shifted following the Prime Minister's speech, where he encouraged a temporary shift away from gold to protect India's foreign exchange reserves. While no formal ban was issued, the high-profile appeal acted as a massive psychological trigger for the markets. Investors fear that a voluntary slowdown by consumers will hit the top line of major retail chains throughout the current quarter.
The selling was concentrated in organized retail players. By 10:45 IST, Titan Company was trading at ₹3,165.40, down over ₹100 from its previous close. Kalyan Jewellers hit an intraday low of ₹408.15, while Senco Gold and Thangamayil Jewellery saw cuts of 3.8% and 4.2%, respectively. The broader Nifty Consumer Durables index outperformed the jewellery sub-sector but remained firmly in the red.
The Double Whammy
The industry is currently facing a storm. Global gold prices remain volatile due to the West Asia conflict, keeping retail rates near record highs of ₹76,400 per 10 grams. Combined with the PM’s appeal to defer purchases, the high entry price is expected to deter even "token" buying during upcoming festivals and weddings. "The message is clear: the government wants to reduce the trade deficit, and gold is the first target," noted a Mumbai-based institutional trader.
Outlook for Retailers
While the long-term structural story for organized jewellery remains intact, the short-term outlook has turned cautious. If the public heeds the PM’s call, quarterly earnings for June and September could see a significant contraction in store footfalls. The market will now closely monitor the government's next move regarding import duties on precious metals.