Signet Jewelers fell more than 3 percent and Tiffany & Co. fell more than 1 percent around midday on Monday.
The low-end diamond market is struggling with too much supply, according to Bloomberg. This has put the squeeze on locations like Surat, India, a major diamond-cutting hub, leading to lower profit margins. The depreciation of the rupee has made matters even worse, the report said. This cut is further indication that the low-end diamond market is in turmoil, according to Bloomberg.
The lower prices at the De Beers sale is unlikely to affect consumer prices, the report said. Another concern may be De Beers' artificial diamonds may add competition in the low-end market, though there is no evidence this happened thus far.
De Beers, which is the world's largest diamond producer, usually changes diamond prices by restricting supply, not reducing prices. The company does not publicize its prices, but the last major cuts, which were in the single-digit percent range, were in 2016 due to economic challenges. It is unknown when the company cut prices in the double-digit percent range.
Signet, Tiffany and De Beers were not immediately available for comment.