Jewellers surge after India eases gold import rules

Shares in jewellery makers surged on Monday after India scrapped the rule that mandated trading companies to export 20 per cent of the gold imported.

The import curb was imposed last year to bring down gold imports, which had pushed India's current account deficit to a record high in the fiscal year ended March 2013.

Titan Co Ltd (TITN.NS: Quote, Profile, Research) gained 5.9 per cent at 9:55 a.m.

Tribhovandas Bhimji Zaveri (TBZL.NS: Quote, Profile, Research) jumped 14.7 per cent and Gitanjali Gems (GTGM.NS: Quote, Profile, Research) surged 18.05 per cent, while PC Jewellers (PCJE.NS: Quote, Profile, Research) was up 9.5 per cent.

Removal of import restrictions may result in increased quantum of gold-on-lease for Titan, as per management, said Motilal Oswal.

Gold-on-lease serves a low cost hedging tool for jewellers and may help them expand without resorting to debt, according to analysts.