Shares of Multi Commodity Exchange of India Limited fell 4.42% to ₹2,765.50 in afternoon trade on June 5, dropping sharply from an intraday high of ₹2,931.90 as RBI Governor Sanjay Malhotra confirmed the central bank will proceed with implementing stricter rules on bank lending for proprietary trading from July 1, 2026.
The intraday chart mirrors the pattern seen in BSE and Angel One, with MCX holding relatively steady through the morning session before a near-vertical decline beginning around 1:00 PM as the Governor’s press conference comments on the July 1 implementation hit trading desks.
Why MCX is particularly exposed
MCX is India’s largest commodity derivatives exchange, where proprietary traders and algorithmic trading firms are among the most active participants. Commodity derivatives markets by their nature attract significant proprietary and leveraged trading activity, with traders using borrowed capital to take positions in crude oil, gold, silver, copper, and agricultural commodities.
The RBI’s new rules close a loophole through which short-term working capital loans from banks were being channelled into proprietary trading activity. Tighter access to bank-funded leverage from July 1 will directly reduce the scale and frequency of proprietary trading on MCX, compressing transaction volumes and the fee revenues that MCX earns per trade.
This is a particularly acute concern for MCX at a time when commodity markets, especially crude oil and precious metals, have seen elevated volatility and heavy trading activity since the Iran war began. That volatility has been a revenue tailwind for MCX through the first half of FY27. Any structural reduction in proprietary participation from July 1 would remove a portion of that tailwind precisely as commodity price volatility may begin to moderate if diplomatic progress on the Iran war resumes.
MCX trades at a P/E of 53.15 with a market capitalisation of approximately ₹70,595 crore. Its 52-week range stands at ₹1,379.20 to ₹3,480.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please consult a qualified financial advisor before making any investment decisions.
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