How gold price rally fueled Manappuram shares at 52-week high — explained

Gold rate today

Today’s stock market: In early morning trading on the NSE, Manappuram Finance’s share price reached a new 52-week high of 133.40. Within a few minutes of Tuesday’s stock market opening bell, Manappuram Financial shares posted an intraday gain of more than 4%. The stock market opened today with an upside gap.

Manappuram Financial shares are increasing these days as a result of rising gold prices, according to stock market experts. They said that the price of gold increased by 8% during the January to March 2023 quarter, which is anticipated to boost the financial company’s business volume and produce higher results during the current results season. They said that the Manappuram share price is in an uptrend and that a breakout at levels of 137 per share is imminent. After offering a breakout at 137, they continued by saying that Manappuram shares may increase to 155 per share levels in one to three months.

Avinash Gorakshkar, Head of Research at Profitmart Securities, commented on how the recent increase in the price of gold has affected the share price of Manappuram Finance: “Following the start of the year 2023, the price of gold has been rising, and the market anticipates that Manappuram Finance will benefit from this trend given its exposure to the gold loan industry. Manappuram Finance Ltd is anticipated to record stronger earnings due to an increase in its gold loan business volume as higher yellow metal prices would enable gold loan applicants to mint more money on their assets. This is due to the continual rise in gold price in the recently finished quarter.”

How did Manappuram shares respond to the sparkling gold?
Profitmart Securities’ expert continued, “Gold rates now are in an upswing and have increased by about 8% in the quarter from January to March 2023, while the price of yellow metal has increased by around 15% in FY23.” This is anticipated to enhance the company’s order book for gold loans, improving the financial company’s quarterly results.

According to Avinash Gorakshkar’s advice to positional stock market investors regarding Manappuram Finance shares, “Gold price is expected to continue rising northward in near term and therefore one who has short term time horizon can add this stock to one’s portfolio while Manappuram Finance shareholders are advised to continue holding the scrip for short term.”

Outlook for Manappuram’s stock price
Sumeet Bagadia, Executive Director at Choice Broking, advised Manappuram Financial shareholders to continue holding the company “After it closes above the 130 per share barrier, Manappuram Finance shares could move higher. Investors who own this financial company are encouraged to hold the stock for further gains while maintaining a trailing stop loss at levels around 120.”

Regarding an advice to new investors, GCL Broking CEO Ravi Singhal said: “Around 137 levels, the Manappuram Financial share is poised to give a new breakout. Once the stock closes above this level, one can start purchasing again with a target price of 155 levels for one to three months. However, while opening new positions in the stock, one must keep their stop loss at $129 a share.”

When the scrip breaks out at a price of 137 per share on a closing basis, Manappuram shareholders can increase their trailing stop loss from 120 to 129, according to Ravi Singhal of GCL Broking.

A rise in gold prices in FY23
In the fiscal year FY23, gold prices saw double-digit rise, making it one of the finest alternatives to provide solid returns in the face of high equity market volatility. In contrast to the Nifty and Sensex, which have often provided flat to negative returns in FY23, gold has increased by a staggering 15% due to macroeconomic risks. The price of gold increased by 8% during the quarter from January to March 2023.

Disclaimer: Currency Veda does not endorse the opinions or suggestions expressed above by specific analysts or brokerage firms. Before making any financial decisions, we suggest investors to consult with licenced professionals.