Gold Financiers Stocks In Focus: Gold financiers such as Manappuram Finance, Muthoot Finance and IIFL Finance were under pressure in trade on Thursday, with the stocks falling up to 5%, even as gold prices continued to remain elevated.
Manappuram Finance fell as much as 5.06% to hit an intraday low of Rs 348.40, while Muthoot Finance declined 2.86% to Rs 3,110.15. IIFL Finance dropped 1.68% to hit an intraday low of Rs 643.
At 12:27 pm, Manappuram Finance was trading 4.20% lower at Rs 351.60, while IIFL Finance was down 1.42% at Rs 644.75. Muthoot Finance was trading 2.81% lower at Rs 3,111.90.
ALSO READ: Jewellery Stocks In Focus: Kalyan Jewellers Gains Over 2%; PC Jeweller, Sky Gold, Senco Slump
Strong Volumes
The decline in gold financier stocks was accompanied by strong trading volumes, which could have contributed to the sharp fall in share prices. Profit booking could also be a factor, particularly as gold prices continue to surge and investors look to lock in gains in gold-linked stocks.
At the time of publishing this report, around 68 lakh shares of Manappuram Finance, worth Rs 238.68 crore, had changed hands across the BSE and NSE. Similarly, around 5 lakh shares of Muthoot Finance, worth Rs 155.55 crore, and 10 lakh shares of IIFL Finance, worth Rs 64.50 crore, had been traded across the two exchanges.
Meanwhile, gold prices remained near elevated levels, although the latest move was marginally lower. In India, Gold 24K was down Rs 430, or 0.27%, at Rs 158,970 per 10 grams, at the time of the latest check.
Expert View
Ravi Singh, chief research officer at Master Capital Services said that the recent decline in gold loan stocks such as Muthoot Finance, Manappuram Finance and IIFL Finance is largely a result of profit booking following the strong run-up seen in both gold prices and these counters.
Gold has also witnessed some profit booking, which has weighed on sentiment across the gold financing space. The correlation remains visible, with these stocks gaining momentum whenever bullion prices move higher.
However, Singh believes that the broader structure of the gold loan segment remains positive. The long-term growth opportunity in secured gold lending continues to remain strong, while recent sector coverage has also highlighted the structural potential for gold loans in India.
"From a technical perspective, the current weakness should be viewed as a healthy correction rather than a change in trend. Any further dip in these counters can provide an opportunity to accumulate selectively, particularly for investors with a medium- to long-term horizon. Muthoot Finance, Manappuram Finance and IIFL Finance remain on the radar, with the overall outlook staying positive as long as the broader price structure remains intact," Singh said.
ALSO READ: Welspun Corp Shares Rally, Hit Record High After Sliding 6% In Previous Session — Details
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
