Jewellery segment shares experienced a sharp decline on Monday following Prime Minister Narendra Modi's call to reduce gold purchases. The prices of Senco Gold and Kalyan Jewellers tumbled by over 8%, while Titan saw a decline of more than 6%.
PM Modi's Appeal to Citizens
Speaking at a rally on Sunday, Prime Minister Modi urged citizens to help preserve foreign exchange reserves. His appeal included avoiding unnecessary foreign travel, overseas vacations, and weddings abroad, while promoting domestic tourism. He specifically called on people to refrain from non-essential gold purchases for the next year to reduce pressure on foreign exchange outflows.
Market Reaction
The statement triggered a significant sell-off in jewellery stocks as investors reacted to the potential impact on demand. Senco Gold was down 8.69% or 31 points to 333 on the BSE, Titan lost 6.45% or 291 points to trade at 4,222 as of 11:11 am. Kalyan Jewellers trimmed 8.3% to 389, and PC Jeweller declined 3.26% to 9.
Meanwhile, Dalal Street also traded in the red, with benchmark indices sliding amid a mix of geopolitical uncertainty, climbing oil prices, and renewed worries over foreign exchange conservation following the Prime Minister's remarks. The BSE Sensex fell to 76,400.71, declining 927.48 points or 1.20%, while the Nifty 50 was down to 23,916.35, shedding 259.80 points or 1.07%.
Expert Insights
Ajay Bagga, Banking and Market expert, commented, "India is a different story and the PM in a public gathering spoke of the energy supply and price challenges for the Indian economy and the need to take measures to reduce energy dependence and imports while conserving foreign exchange. Indian markets are pointing to a weak open. Expectations of petrol and diesel price hikes this week are high as OMC losses are running at Rs 30,000 crores per month."
Bagga also flagged global geopolitical developments as a critical overhang for markets, particularly around the US-Iran situation. He said, "Markets are focusing on the AI/Big Tech momentum and ignoring the tail risks from a re-escalation from US-Iran. Netanyahu in an interview yesterday said that he sees the Iran war as not over till Iran's nuclear facilities are obliterated. The second-order conclusion is that China, which controls Iran, has not deemed it fit to help the Trump-Xi Summit by pressurising Iran to agree to at least a temporary truce."
On the implications for upcoming diplomatic developments, the expert added that this may temper hopes from the Trump-Xi Summit, saying, "expect Trump to transactionally try to blind side Xi, while the Chinese will come well prepared with countermeasures to keep the narrative in control."
Broader Market Outlook
Sujan Hajra, Chief Economist at Anand Rathi, stated in a report that despite broader optimism, crude-related risks continued to shape investor caution. "Markets stayed optimistic, but nerves around crude never really left the room. Indian equities still ended higher, with broader markets outperforming as midcaps and smallcaps extended their strong rally. Autos and IT supported sentiment, while banks and metals struggled under earnings disappointments and rising global uncertainty."
He said India's economic fundamentals remained firm, with stronger PMI trends and domestic demand offering support, but warned that elevated oil prices, logistical disruptions, and tensions linked to the Strait of Hormuz were keeping inflation concerns in focus. "Central banks globally remained cautious on rate cuts as energy-led price pressures continued to complicate the outlook. Growth is holding up, but global risks are beginning to make resilience more expensive," Hajra said.
Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India.
