Mumbai– Following the $1.8 billion fraud detected by the Punjab National Bank (PNB), stocks of jewellery company Gitanjali Gems on Friday plunged almost 20 per cent — hitting its lower circuit — while PNB’s shares closed over 2 per cent lower.

Stocks of Gitanjali Gems, the luxury jewellery brand promoted by the main accused Nirav Modi’s maternal uncle and business partner Mehul Choksi, plunged 19.94 per cent to close at Rs 37.55 per share.

“Price-wise, the way the stock of Gitanjali Gems has slipped and the kind of circuit that we are seeing, probably the sequence may continue for some days. From a support perspective, Rs 29-30 is a support,” Sacchitanand Uttekar, Assistant Vice-President, Research for Tradebulls, told IANS.

“But with developments in the company going off-track, how much will it hold is something that time will decide,” he added.

According to market analysts, the stock prices fall to an effective level which gives the traders the chance to reinvest in the stock and arrest the fall.

“The stocks fall to a level where the current negatives seem fully discounted, prompting traders to re-enter. The exchanges keep changing the circuit limits, which typically cushions the rise or the fall in stock prices,” Deepak Jasani, Head – Retail Research, HDFC Securities, told IANS.

The shares of PNB — the second largest public sector bank in India — started to decline after the bank detected a multi-crore fraud case in one of its branches in Mumbai on February 14, and authorities blamed billionaire diamond trader Nirav Modi for the fraud.

On a closing basis, scrips of PNB slipped by 2.10 per cent to Rs 125.65 per share, lower by Rs 2.70 from the previous close at Rs 128.35.

PNB on Wednesday told the stock exchanges through a regulatory filing that it detected fraudulent transactions at $1,771.69 million (around Rs 11,515 crore) in one of its branches in Mumbai, which is equivalent to eight times the bank’s net income of about Rs 1,320 crore ($206 million).

On the same day, the bank’s shares had plunged drastically following the news of the fraud to close lower by 9.81 per cent at the BSE. On Thursday, too, the scrips dropped by almost 12 per cent.

The fraud, which included money-laundering among other things, concerned the Firestar Diamonds group of Modi, in which the Central Bureau of Investigation (CBI) has booked Modi, his wife Ami, brother Nishal and uncle Choksi.

On Thursday, the Enforcement Directorate launched a nationwide raid on the offices, showrooms and workshops of Nirav Modi.

The CBI on Friday registered a FIR against the Gitanjali Group of companies based on a complaint registered by the PNB. (IANS)