Indian jewellery retailers experienced severe stock declines on Monday following Prime Minister Narendra Modi's appeal to reduce gold purchases. According to Reuters, shares of jewellery makers such as Titan, Senco Gold and Kalyan Jewellers fell between 6% and 8% on Monday, with Sky Gold and Diamonds plunging over 12%, Senco Gold dropping nearly 11%, and Kalyan Jewellers declining 8.3%, significantly underperforming the broader market. The benchmark Nifty50 closed 1.49% lower as investors and industry executives weighed the potential impact of the policy announcement. Titan Company fell as much as 6.4% despite reporting strong quarterly earnings, highlighting the market's concern over government messaging on discretionary consumption. Investors sold stocks for the fourth consecutive trading day on May 12, 2026, with Nifty 50 and Sensex declining by over 1.8%, closing at 23,379.55 and 74,559.24 points respectively. The market rout was broad-based, with 2,750 stocks declining on the Nifty 50 and just 590 advancing, while all 21 sector-based indices declined with many crashing by more than 2%.
The market decline was compounded by Brent Crude futures climbing above $107 per barrel as stalled US-Iran negotiations kept supply disruption fears firmly alive. As reported by The Hindu BusinessLine, Donald Trump publicly dismissed Tehran's latest proposal as "garbage" and described ceasefire prospects as being on "massive life support", with the Strait of Hormuz remaining effectively at a near-standstill. For India, a heavily oil-import-dependent economy, elevated crude prices translate directly into a wider current account deficit, higher inflation and pressure on forex reserves. The rupee bore the brunt of this anxiety, slipping to a fresh record low of ₹95.63 against the US dollar, down roughly 40 paise in the session as FII outflows intensified and dollar demand surged. Foreign Institutional Investor interest in Indian equities, measured by the net outflows, has been hitting new lows, crossing over ₹2 lakh crore as of May 12, 2026.
Despite the sharp market decline, major jewellery companies reported robust quarterly results that contrasted sharply with investor sentiment. Titan Company reported strong March quarter earnings with consolidated net profit rising 35.4% year-on-year to ₹1,179 crore. Revenue from operations surged 77.6% to ₹23,934 crore during the quarter, while its jewellery business grew 50% year-on-year to around ₹18,195 crore, excluding bullion and digi-gold sales. The Tata Group company also announced a dividend of ₹15 per share for FY26. Kalyan Jewellers reported even stronger profit performance with Q4 net profit jumping 118.2% year-on-year to ₹409.5 crore, while revenue increased 66.2% to ₹10,274.9 crore. Its board recommended a final dividend of ₹2.5 per share for FY26.
IT stocks emerged as the session's biggest casualty, with Nifty IT declining nearly 4%, beyond the macro headwinds facing the broader market. According to The Hindu BusinessLine, the sector faced a sector-specific shock when OpenAI announced "The Deployment Company," a new enterprise AI implementation unit backed by the acquisition of consulting firm Tomoro, stoking fears that AI majors are moving aggressively into territory long held by Indian IT firms. Infosys, TCS, HCLTech and Tech Mahindra were among the hardest hit in the IT space. Nifty Realty and Consumer Durables also posted sharp losses, while ONGC and Hindalco managed to buck the trend, with upstream oil companies broadly seen as beneficiaries of elevated energy prices. The Nifty Midcap 100 fell 2.54% and Nifty Smallcap 100 tumbled 3.17%, reflecting widespread risk aversion well beyond blue-chip counters, with 463 of the Nifty 500 stocks closing in the red.
The Nifty 50 closed at 23,379.55, down 436.30 points or 1.83%, marking its steepest single-session decline since March 30, 2026. As per The Hindu BusinessLine, Virat Jagad, Senior Technical Research Analyst at Bonanza, noted that "bears have gained control in the near term...the index now appears headed towards the gap-fill zone of 23,080–23,100," pointing to the next major support area after Nifty decisively breached the 23,500 mark. India VIX climbed a further 3.92% to close at 19.28, building on a 10% spike from the previous session, keeping option premiums elevated and market participants firmly on edge. Siddhartha Khemka, Head of Research, Wealth Management, at Motilal Oswal Financial Services, noted that "market sentiment is likely to remain fragile until there is greater clarity on geopolitical developments and stability in energy prices." Eyes now turn to India's April 2026 retail inflation data, due from MoSPI, which will be closely parsed for signals on the RBI's rate trajectory.
