Jewelery Stocks Fall: A huge fall in the shares of jewelery companies was recorded on Monday after Prime Minister Narendra Modi appealed to the people to avoid buying non-essential gold for a year. Investors fear that this advice may have an impact on the demand for gold, which may affect business.
During an event in Hyderabad, the Prime Minister had appealed to the people to give priority to ‘Made in India’ products and reduce unnecessary expenditure on foreign goods. In this sequence, he advised to postpone new purchases of gold, so that the pressure on foreign currency can be reduced.
After this comment of the Prime Minister, there was a decline in the shares of many big companies of the jewelery sector. Sharp selling was recorded in shares of many companies including Titan Company, Kalyan Jewelers and Senco Gold.
Market experts believe that if people move towards exchange of old jewelery instead of new purchases, the business model of jewelery companies may be affected. Due to this, the earnings of companies may depend more on making charges and service fees rather than on the sale of gold.
Meanwhile, opposition leader Rahul Gandhi questioned the Prime Minister’s appeal and called it a failure of economic management. At the same time, many organizations associated with the jewelery industry have expressed concern that due to long-term impact on demand, the employment of lakhs of people may be affected.
However, some industry representatives believe that the cultural and family significance of gold is so deep in Indian society that it is difficult to stop its purchase completely, especially during the wedding season.