Shares of gems and jewellery companies surged in trade on Monday, amid a broader rally after the India-US interim trade deal agreement lifted investor sentiment. The interim trade framework confirmed that the US will reduce the reciprocal tariffs on Indian exports of gems and diamonds to zero.
The interim trade deal offers clarity for India's export-linked sectors. The jewellery sector, which has been struggling with shrinking exports for the last few years, is poised to emerge as a key beneficiary.
Leading gems and jewellery stocks, including Titan Co., Kalyan Jewellers, Senco Gold and PC Jewellers, rallied up to 16% in intraday trade.
According to the interim trade agreement, the US tariff on cut and polished diamonds has been reduced to 18% from 50%. Jewellery manufacturers, exporters and organised retailers are set to immensely benefit from the interim trade pact, as the US is one of the largest markets for Indian companies in the sector. Under the interim pact, the US will reduce the reciprocal tariff to 18% for a wide range of Indian goods such as textiles and apparel, leather and footwear, jewellery and artisanal products, which will directly benefit the gems and jewellery companies.
Jewellery Stocks Rally Up To 16%
Major gems and jewellery stocks closed in the green on Monday amid a positive trend across sectors. The benchmark Nifty 50 settled 0.68% higher at 25,867.3.
Shares of Titan rallied as much as 3.1% to hit an intraday high of Rs 4,269.4 apiece on the NSE. However, shares of the Tata Group-backed jewellery and luxury watch retailer pared some of the gains to close 3.04% higher at Rs 4,267 apiece. Kalyan Jewellers shares settled with a gain of 14.66% at Rs 436 apiece on the NSE. Earlier, the stock rallied up to 16.48% to hit an intraday high of Rs 442.95 apiece.
Senco Gold also advanced as much as 8.18% to touch an intraday high of Rs 360 per share before settling at Rs 355.7, up 6.9%. Shares of PC Jeweller Ltd. rallied up to 5.61% during the session to touch an intraday high of Rs 10.73. The stock, however, pared some of its early gains to close 2.85% higher at Rs 10.45 apiece.
The rally in jewellery stocks was witnessed as investors banked on a positive export outlook following the trade agreement between India and the United States. India is a major hub for diamond cutting and processing. Reduction of tariff by the US government under the pact is expected to increase the export volume for Indian gems and jewellery companies.
ALSO READ: India-US FTA: Full List Of Items With Zero Tariff
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