India's jewelry stocks took a beating on Monday, with shares of major retailers dropping as much as 12% after Prime Minister Narendra Modi called for a one-year halt on gold purchases. The Nifty Consumer Durables index closed 4% lower, and Titan Company emerged as the single biggest drag on the Nifty 50. Senco Gold and Thangamayil Jewellery each shed about 9%, Kalyan Jewellers slipped 8%, and Goldiam International fell roughly 6%. Sky Gold lost as much as 12% intraday before paring some losses.
Why the Prime Minister's Appeal Hit Gold Stocks
Modi's weekend appeal came amid a sharp run-up in Brent crude prices tied to escalating West Asia tensions. India imports about 85% of its oil, and higher energy costs have been straining the country's trade balance. The government data shows gold imports rose 24% to $71.98 billion in fiscal 2025-26, compared with $58 billion the previous year. India is the world's second-largest gold consumer after China and a net importer of the metal, making any curb on buying a direct hit to jewelry retailers.
The Prime Minister did not specify any enforcement mechanism, but the market interpreted his statement as a strong signal that the government wants to curb gold demand to ease pressure on the rupee and foreign exchange reserves. The currency weakened past 95 against the dollar during Monday's session, and forex reserves dropped $7.79 billion in the week ended May 1 to $690.69 billion.
Broader Market Fallout
The selloff was not limited to jewelry stocks. The benchmark Sensex closed 1,004 points lower at 76,321.62. The India VIX, a gauge of market volatility, spiked 11.89% to 18.84, reflecting broad investor anxiety. Analysts pointed to a double whammy of higher oil prices and the gold buying pause suggestion, which together worsened sentiment toward the consumer discretionary sector.
Traders also priced in weaker volumes for the upcoming wedding season, which typically drives about half of India's annual gold purchases. A voluntary or enforced pause during that period would significantly hurt sales for companies like Titan and Kalyan Jewellers, which rely heavily on seasonal demand.
The Reserve Bank of India is widely expected to step in to defend the rupee, possibly through tighter monetary policy or direct intervention in currency markets. Any action that further restricts gold imports could deepen the sales slowdown for jewelry retailers. Investors are now waiting to see whether the government follows Modi's appeal with actual import curbs or duties, and how the wedding season demand shapes up in the coming weeks.
