Among the major losers, Manappuram Finance declined nearly 7% to ₹289.45, while Muthoot Finance fell close to 4% to ₹2,873. Hindustan Zinc, India’s only listed pure Silver play fell 3%, while IIFL Finance fell 2%.
Muthoot Finance touched a nine-month low of ₹2,870.45 during the session. The stock has now corrected around 31% from its 52-week high of ₹4,149 touched in January this year.
Why Manappuram, Muthoot Finance Shares Fell?
The selling pressure followed a sharp decline in gold prices. Domestic gold rates fell nearly 2% on Wednesday to their lowest levels since early May, slipping below levels seen before the recent increase in import duties.
Last month, India raised import duties on gold and silver to 15% from 6% as part of measures aimed at curbing imports and easing pressure on foreign exchange reserves.
Globally, bullion extended losses after a weak previous session. According to Bloomberg, gold dropped as much as 2% to below $4,175 an ounce after falling 1.6% in the previous session. Silver declined 2.3%, while platinum and palladium also traded lower.
The pressure on gold prices may not be over yet. Bloomberg reported that bullion is now trading around 20% below levels seen before the Iran conflict began in late February. The metal’s fall below its 200-day moving average, a closely watched technical indicator among institutional investors, has also triggered additional selling pressure.
“We expect price action to become more vulnerable in the near term,” Bloomberg quoted Suki Cooper, global head of commodities research at Standard Chartered Plc, as saying. She added that further declines could increase downside risks as more holdings in gold-backed exchange-traded funds move into loss-making territory.
The decline has sparked concerns around growth prospects for gold financiers, whose recent loan growth has been supported by rising gold prices and higher borrowing eligibility against pledged jewellery.
Adding to the cautious sentiment, gold-backed exchange-traded funds recorded their first outflow since April 2025, signalling some cooling in investor demand as bullion prices remain under pressure, according to AMFI data.
However, analysts and company managements have repeatedly maintained that moderate corrections in gold prices do not materially alter asset quality metrics. Manappuram Finance’s loan-to-value ratio (LTV) stands at around 57%, providing a sizeable collateral cushion even after the recent fall in bullion prices.
Also Read: Gold ETFs see record outflow in May, silver ETFs gain ₹2,133 crore
Shares of Manappuram Finance fell 6.5% on Wednesday to ₹287.3, while those of Muthoot are down 3.2% to ₹2,895.6. Muthoot Finance shares are down 15% so far in the last one month.
