Buying frenzy in Jewellery stocks as RBI eases import norms

Business

oi-Sunil

By Sunil Fernandes

Updated: Thursday, May 22, 2014, 10:09 [IST]

Buying frenzy was seen in Jewellery stocks after the Reserve Bank of India eased gold import norms. TBZ was up a huge 16 per cent, Gitanjali Gems was up 11 per cent, Tara Jewels was up 9 per cent at Rs 113, while Shree Ganesh Jewellery was locked at the upper end of the circuit filter with gains of 5 per cent. The counter saw no sellers in trade today.

The Reserve Bank on Wednesday said that it had eased gold import norms by allowing select trading houses, in addition to already permitted banks, to procure the precious metal to boost exports.

The Reserve Bank of India in July last year had imposed severe restrictions on gold imports in order to check burgeoning current account deficit and sliding rupee.

The central bank had tied imports with exports and prescribed a 20:80 formula. This facility was available to select banks only and other entities were barred from importing the metal.

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With the current account deficit now under control, investors are betting on the RBI and the government easing gold rates even further. This is likely to see jewellery stocks rallying even further in the coming days.

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