Muthoot, Manappuram Fin shares fall as much as 5% as gold prices retreat

Shares of Muthoot Finance Ltd. and Manappuram Finance Ltd. tumbled on Thursday as gold prices saw a sharp fall, as investors booked profits amid easing US-India trade tensions. 

 

Muthoot Finance stock fell as much as 5 per cent, while Manappuram Finance shares slipped 2.8 per cent on Thursday. As of 1:00 PM, the shares of Muthoot Finance and Manappuram Finance were trading 3.4 per cent and 1.9 per cent lower, respectively. At the same time, the benchmark Nifty50 was trading 0.7 per cent higher. 

 

Muthoot Finance shares have risen 47 per cent so far this year, while Manappuram Finance was up 48 per cent. Meanwhile, the Nifty index is up 10.2 per cent this year.

 

Gold prices extend fall 

Gold prices fell was near a two-week low, following their sharpest single-day drop in five years in the previous session, according to Reuters, as investors booked profits ahead of key US inflation data due this week. Spot gold fell to $4,038.89 per ounce on Wednesday. From their high levels of $4,356 per ounce, the prices are trading at 4,116.76 as of 1:00 PM IST. 

 

Gold prices have notched multiple record highs and gained 55.59 per cent this year, amid geopolitical tensions, economic uncertainty, expectations of US rate cuts and strong inflows into ETFs, Reuters said. Meanwhile, Investors are also awaiting clarity on next week's potential meeting between Trump and Chinese President Xi Jinping.

 

Stocks rallied in India while safe-haven assets took a toll as reportedly India and the US are likely to close the trade deal soon, in which the tariffs for Indian exports could be slashed to 15-16 per cent from 50 per cent.   ALSO READ | Vikram Solar rises 4% on winning 148.9 MW topcon solar modules order

Gold loan industry trend

The gold loan industry in India is projected to double in value by the financial year 2028-29, underpinned by several critical trends. A primary factor is the anticipated expansion of the organised sector, which is expected to increase its market share from 37 per cent to over 50 per cent by the financial year 2028-29, Manappuram Finance said in its FY25 annual report.

 

This transition is driven by the formalisation of lending practices, enhanced customer experiences, and a growing trust in regulated entities. Furthermore, government initiatives such as the Digital India Mission aim to improve broadband and mobile connectivity in rural areas, thereby enhancing the digital infrastructure required for a swift uptake of gold loans, the company said.