On Tuesday stock prices for jewellery shares was down after a spree of selling in two consecutive days.
Gitanjali Gems, jewellery manufacturer declined by 20 per cent to Rs. 324.30. Tribhovandas Bhimji Zaveri, another branded jeweller, fell 3.3% trading lower at Rs.176 after a 7% per cent dip on Monday.
PC Jeweller traded lower by 3.8 % after a 10 per cent decline on Monday. Among other shares, Titan Industries, which began the month with a sell-off, has yet to make gains.
In an attempt to reverse the selling trend, the All India Gems & Jeweller Trade Foundation, made a request to jewellers not to sell bullions and coins to retailers. The trade group also tried to convince consumers to refrain from selling bullion.
Addressing the selling pressure, billionaire-entrepreneur Anil Ambani of Reliance announced his firm had halted the selling physical gold and investment products linked to the precious metal.
The government has also taken stiff measures to curb imports. Import tax on gold was spiked to 8 percent in June to discourage imports.
Gold is the second-biggest import to India trailing crude oil. However, these imports have to be paid with foreign currencies. This has resulted in a huge account deficit for the world's largest democracy.
Despite the government's intervention, the Indian rupee has devalued to a low of 59.98 last week against the dollar.
In the quarter ending in December 2012, India's current deficit stands at a record 6.7 percent and is the biggest bullion importer in the world. Demand for gold has been high in India since it is traditionally exchanged during weddings and gifted on special cultural occasions.
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