Muthoot Finance, Manappuram shares gain up to 3% as gold prices rebound

Shares of gold financing companies rose by up to 3 percent on Monday as gold prices rebounded in domestic and international markets.

On the National Stock Exchange (NSE), shares of Muthoot Finance gained 3 percent to Rs 2,938.50 at 11:45 am. Manappuram Finance shares were trading 0.45 percent higher at Rs 324.40. IIFL Finance shares also rose nearly 0.4 percent.

In the futures market, gold prices climbed Rs 1,801, or 1.26 percent, to Rs 1,44,353 per 10 grams on the Multi Commodity Exchange (MCX) for December delivery. The contract recorded a business turnover of 1,007 lots.

Analysts attributed the rise to fresh positions created by market participants amid firm spot demand.

In international markets, gold futures rose 1.43 percent to USD 4,128.83 per ounce in New York.

Globally, gold prices gained as softer oil prices eased inflation concerns, while investors awaited key US inflation data and fresh signals from the Federal Reserve on its monetary policy outlook.

Oil prices declined after US President Donald Trump said he was highly unlikely to order further attacks on Iran, as negotiations to end the conflict continued. The decline eased concerns over potential supply disruptions.

Lower oil prices can reduce inflationary pressures and expectations of interest rates remaining elevated for longer, thereby lowering the opportunity cost of holding non-yielding assets such as gold.

The US dollar also weakened, making gold, priced in the greenback, more affordable for overseas buyers.

Meanwhile, US job growth accelerated in October and the unemployment rate declined to 4.1 percent, reinforcing expectations that the labour market remained resilient and keeping the Federal Reserve on track for a December interest rate increase.

(With inputs from Reuters)