Jewellery stocks plunge up to 7 pc on customs duty hike

Jewelry stocks Friday ended with losses and fell as much as 7 percent following the budget proposal to increase customs duty on gold and other precious metals to 12.5 percent from 10 percent. On the BSE, shares of Thangamayil Jewellery closed down 7.43 percent to Rs 312.90. Similarly, PC Jeweller fell 4.95 percent to end at Rs 40.35.

The scrip of Tribhonvandas Bhimji Zaveri declined by 3 percent to Rs 43.05, while Golkunda Diamonds and Jewellery ended 2 percent lower at Rs 14.70. Titan Company fell 1 percent to close at Rs 1,277.75 on the BSE.

The government proposed to increase customs duty on gold and other precious metals to 12.5 percent, a move which would make the yellow metal and jewelry expensive in the domestic market. The industry bodies were expecting a duty cut as higher tax structure had an impact on sales, said Hareesh V, Head-Commodity Research at Geojit Financial Services.

"The higher import duties affect jewelry exports as it will reduce the margin for jewelry exporters. The retail consumption may get partially affected, especially in wedding season, as we may see a rise in supply from scrap gold and household jewelry," HDFC Securities Senior Analyst (Commodities) Tapan Patel said.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)