Shares of Multi Commodity Exchange of India (MCX) fell nearly 9% in pre-market trade on Sunday, February 1, tracking an unprecedented collapse across commodity markets on Budget Day.
The sharp fall in MCX stock comes as gold, silver and copper futures simultaneously hit the 6% lower circuit on the exchange during the special Budget Day trading session, severely denting sentiment around commodity-linked stocks.
Historic crash in metals hits MCX sentiment
Commodity markets witnessed a historic selloff, with silver plunging as much as 25–36% in a single session last week, while gold recorded its worst one-day fall in over four decades. Copper also reversed sharply after touching record highs. This extreme volatility has rattled traders and raised concerns about near-term trading activity on commodity exchanges.
Lower volumes, higher risk perception
MCX’s revenues are closely linked to trading volumes and market participation. When commodities hit circuit limits and liquidity dries up, trading activity typically slows, directly impacting transaction fees earned by the exchange. The Budget Day lower circuits across major metals heightened fears of volume disruption in the near term.
Profit booking after sharp run-up
MCX shares had rallied strongly in recent weeks amid surging interest in commodities driven by the metals bull run. The sudden reversal triggered profit booking, with investors reassessing valuations as commodity prices collapsed sharply.
Global factors amplified the selloff
The selloff in metals was driven by a combination of profit-taking, a firmer US dollar, and fading expectations of aggressive US interest rate cuts after President Donald Trump announced former Fed Governor Kevin Warsh as his choice to lead the Federal Reserve. These factors fed directly into the sharp fall in commodity prices, indirectly pressuring MCX shares.
The bottom line
MCX shares fell not due to any company-specific negative development, but because of a once-in-a-generation crash in key commodities traded on the platform. The historic lower circuits in gold, silver and copper spooked investors, led to profit booking, and raised short-term concerns over trading volumes—dragging the stock down sharply on Budget Day.
