Stock markets gear up for Akshaya Tritiya

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With an aim to cash in on the investor demand for gold on auspicious occasion of Akshyaya Tritiya, the markets have lined up extended trading hours and special incentives for trade in the yellow metal on Tuesday.

Both the leading stock exchanges, BSE and NSE, would allow trading till 8 pm in gold ETFs (Exchange Traded Funds), which allow buy and sale of the yellow metal in paperless electronic format, on Akshaya Tritiya day on April 24.

Besides, the two bourses have decided to waive the transaction charges for all trades done in Gold ETF securities on that day on account of Akshyaya Tritiya.

The National Spot Exchange Ltd (NSEL) has also announced special offers on E-Gold, E-Silver and E-Platinum for Akshaya Tritiya. These include zero transaction charges and waiver of making and packing charges on physical conversion of E-Gold, E-Silver and E-Platinum.

"The day of Akshaya Tritiya in India has been traditionally considered very auspicious for purchasing gold, silver, ornaments, precious stones, real estate and other long term assets," Religare Broking CEO Gagan Randev said.

It is widely believed that any new venture or asset creation initiated on this day will bring in good luck, growth and prosperity.

"While there is a visible surge in purchase of physical gold on Akshaya Tritiya over the years, consumer interest in purchasing non-physical gold on this day has also increased significantly over the last couple of years," Randev said.

On Akshaya Tritiya in 2011, investors traded in gold ETFs with turnover exceeding Rs 500 crore on NSE and BSE, which is more than double the volumes of 2010.

This year also, the volumes are expected to exceed the last year's levels, Randev said.

Gold ETFs, by far the most popular form of investment in non-physical form, are traded like shares and are backed by physical holdings of the yellow metal. Investors need to open a demat and broking account with any brokerage firm to trade in over a dozen Gold ETFs currently available in the market.

One unit of Gold ETF is equivalent to approximately one gram of gold.

NSE said that gold ETFs have seen a phenomenal growth on its platform since being launched in 2007. From a traded value of Rs 1,172 crores in 2008-09, the value increased to Rs 11,532 crores in 2011-12 -- a growth of 883 per cent.

The assets under management in Gold ETFs has also seen a huge spike over the years. They have gone up from Rs 3,765 crore in March 2011 to Rs 9,516 crores in March 2012.

NSE further said that some of its members have also started offering SIPs (systematic investment plans) on gold ETFs, making it even more convenient for investors.

The returns are linked to the domestic price of physical gold in gold ETFs, but they spare the investors the trouble of buying and keeping the yellow metal in physical form.