Kalyan Shares Plummet Amid Stake-Sale Anxiety
Shares of Kalyan Jewellers have seen a dramatic decline, marking their steepest drop in three years as concerns over potential stake sales unsettle investors. The company’s stock extended its losing streak for the ninth consecutive session, falling over 12% on Wednesday alone. Here’s a closer look at the factors driving this turbulence.
Key Factors Behind the Decline in Kalyan Shares
– Stock Performance:
– Kalyan Jewellers’ shares closed at ₹397.2, reflecting a 12.02% loss for the day and a cumulative drop of 24% over nine sessions.
– This decline represents the sharpest decrease since December 2022.
– Market Sentiment:
– Analysts are warning that the stock may continue to face downward pressure as fears surrounding a mutual fund’s potential exit grow.
– “The company’s strong business update for the third quarter earlier this month initially boosted its stock by about 4%. However, concerns over increased promoter share pledging— rising from 19% to 25% during the December quarter—have since alarmed shareholders,” explains Arijit Malakar, equity research analyst at Ashika Stock Broking.
– High Trading Volume:
– On Wednesday, the total traded quantity surged to 26.52 lakh shares, an increase from a two-week average of 4.57 lakh on the BSE.
Technical Analysis of Kalyan Shares
– Market Patterns:
– Analysts highlight a persistent trend of lower highs and lower lows on Kalyan’s daily charts since January, indicating an ongoing downtrend.
– According to Somil Mehta, head of retail research at Mirae Asset Sharekhan, Wednesday’s sell-off confirmed further weakness in the stock’s price structure, reinforcing bearish sentiment.
– Future Projections:
– Mehta cautions that the overall trend appears negative and anticipates a continued decline in the stock’s value.
– Potential downside levels to watch include ₹350, followed by ₹320.
Investor Recommendations
– Cautious Strategy:
– Analysts recommend that investors approach Kalyan shares with caution. Malakar advises holding off on purchases until the final third-quarter results are released, allowing for a clearer perspective on the company’s outlook.
– Monitoring the Situation:
– Traders are urged to keep an eye on the stock’s performance as further developments unfold, especially regarding any confirmed stake sale by mutual funds.
Investors should be aware of the underlying anxiety rooted in Kalyan Jewellers’ recent performance. The company’s fluctuating shares, marked by significant technical indicators and high trading volumes, signal a turbulent period ahead. Thus, staying informed and cautious is paramount for navigating this volatile landscape.