Riding the boom the gold prices are witnessing both in international and domestic markets, shares of two jewellery outfits and units of gold ETFs traded on the exchanges surged to their 52-week high on Thursday.
That these stocks constituted about 15 per cent of the traded stocks to hit 52-week highs on the NSE today reflected the strong investor support the yellow metal is drawing.
The Madurai-based Thangamayil Jewellery Ltd (TMJL) touched an all-time high of Rs 234.70 on the NSE before easing to Rs 220.25 at close, a gain of Rs 14.75. The counter witnessed a trading volume of 1.78 lakh shares.
Similarly, Goenka Diamond and Jewels Ltd was another jewellery stock to move up to a new high of Rs 223 before dipping marginally to Rs 220, a gain of 30 paise. The share recorded a trading volume of about 38,000.
The other six gold related instruments to hit the 52-week highs were gold ETFs of mutual funds that are traded on the NSE. They are Axis MF’s Gold ETF, Birla Sun Life Gold ETF (Growth), UTI Gold ETF, Quantum Gold Fund ETF, Reliance Gold ETF and Religare Gold ETF.
Rocketing gold price
The surge in gold ETF/jewellery stocks could be attributed to the rocketing gold prices to an all-time high of Rs 31,029/ 10 gram in the Multi Commodity Exchange for December delivery. Gold price for October delivery shot up to Rs 30,699/ 10 gram. The zoom in gold prices in futures trade in India followed the rise in the price of the yellow metal in the overseas markets.
But the surge in gold ETFs or jewellery stocks does not appear to be a one-off phenomenon. Over a three- and five-year period, three gold ETFs have each figured among the top five MF performers of all schemes, according to data from www.mutualfundsindia.com , an ICRA online initiative.
Considering the fact that the sharp fall in Indian rupee against US currency was more a one-year phenomenon, the currency decline alone is not responsible for their stellar performance.