Jewellery stocks plunge up to 7 pc on customs duty hike

Jewellery stocks Friday ended with losses and fell as much as 7 per cent following the budget proposal to increase customs duty on gold and other precious metals to 12.5 per cent from 10 per cent.

On the BSE, shares of Thangamayil Jewellery closed down 7.43 per cent to Rs 312.90. Similarly, PC Jeweller fell 4.95 per cent to end at Rs 40.35.

Scrip of Tribhonvandas Bhimji Zaveri declined by 3 per cent to Rs 43.05, while Golkunda Diamonds and Jewellery ended 2 per cent lower at Rs 14.70.

Titan Company fell 1 per cent 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 per cent, a move which would make the yellow metal and jewellery 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 jewellery exports as it will reduce the margin for jewellery exporters. The retail consumption may get partially affected, especially in wedding season, as we may see rise in supply from scrap gold and household jewellery," HDFC Securities Senior Analyst (Commodities) Tapan Patel said.