Shares of five jewellery retailers lost 0.49% to 3.9% at 15:15 IST on BSE, with these stocks sliding on profit booking after yesterday's rally triggered by the government's approval for introduction of Gold Monetization Scheme.
Tara Jewels (down 3.9%), Rajesh Exports (down 3.53%), Titan Company (down 1.27%), Tribhovandas Bhimji Zaveri (down 1.71%) and PC Jeweller (down 0.49%) edged lower. Shree Ganesh Jewellery House (I) (up 0.57%) and Gitanjali Gems (up 1.19%) edged higher.
Meanwhile, the S&P BSE Sensex was down 106.78 points or 0.42% at 25,612.80.
Shares of jewellery retailers rallied yesterday, 9 September 2015, after Union Cabinet gave its approval for introduction of Gold Monetization Scheme (GMS). The new scheme consists of the revamped Gold Deposit Scheme (GDS) and a revamped Gold Metal Loan (GML) Scheme. The revamped GDS and the GML Scheme involves changes in the scheme guidelines only, a statement from the government said. The risk of gold price changes will be borne by the Gold Reserve Fund that is being created, it added.
Under the revamped GML Scheme, a gold metal loan account, denominated in grams of gold, will be opened by the bank for jewelers. The gold mobilized through the revamped GDS, under the short-term option, will be provided to jewelers on loan, on the basis of the terms and conditions set-out by banks, under the guidance of the Reserve Bank of India (RBI). When a gold loan is sanctioned, the jewelers will receive physical delivery of gold from refiners. The banks will, in turn, make the requisite entry in the jewelers' gold loan account. The interest rate charged on the GML will be decided by banks, with guidance from the RBI. The tenor of the GML at present is 180 days. Given that the minimum lock-in period for gold deposits will be one year, based on experience gained, this tenor of GML may be re-examined in future and appropriate modifications made, if required, the statement from the government said.
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