MCX Shares Crash 15% in Special Budget Session Trading
The Multi Commodity Exchange of India (MCX) witnessed a dramatic selloff during the special Budget session on Sunday, February 1, with its share price plunging as much as 15% in intra-day trade. This marked the steepest single-day decline for the exchange's stock in five years, creating significant turbulence in the commodity trading sector.
Precipitous Fall Below Record Highs
MCX stock tumbled to an intra-day low of ₹2,146.25, representing a substantial 15% drop from previous levels. At this nadir, the counter stood nearly 21% below its all-time peak of ₹2,706.00 achieved just days earlier on January 29, 2026. This sharp reversal contrasted starkly with the stock's 52-week low of ₹882.02 recorded in March 2025, highlighting the extreme volatility in recent trading sessions.
Silver and Gold Contracts Trigger Market Turmoil
The collapse in MCX shares directly followed severe pressure in precious metal contracts traded on the exchange:
- Silver prices crashed 9% to hit the lower circuit at ₹2,65,652 per kilogram
- Gold prices similarly hit their 9% lower circuit at ₹1,36,185 per 10 grams
- The selloff intensified from Friday, January 30, when silver had already plunged 19% to ₹3.12 lakh per kg
- This dramatic reversal came immediately after silver touched a record high of ₹4,04,500 per kg on Thursday
Long-Term Performance Remains Impressive Despite Setback
Despite the sudden downturn, MCX shares have demonstrated remarkable resilience over extended periods:
- One-year performance: The stock surged 91% over the past twelve months
- Six-month gains: It advanced 45% during this period
- Three-month movement: The stock rose 19% in the quarter
- Five-year returns: Investors enjoyed multibagger returns of 591% over this timeframe
This strong longer-term performance had been supported by the sustained rally in precious metal prices throughout recent months, though Sunday's session represented a significant correction.
Global Factors Driving Precious Metals Meltdown
Multiple international developments converged to create the perfect storm for commodity markets:
- US Dollar Strength: Investors rushed to lock in profits amid a strengthening US dollar, reducing appetite for safe-haven assets like gold and silver
- Federal Reserve Uncertainty: Market volatility has persisted since US President Donald Trump nominated Kevin Warsh as Federal Reserve Chair, with concerns about potential policy shifts
- Margin Increases: CME Group announced significant margin hikes on Comex gold and silver futures following the steepest price declines in decades
Detailed Margin Adjustments Impact Trading
The CME Group's margin changes represent a substantial tightening of trading conditions:
- Gold margins increase to 8% from 6% for non-heightened risk profiles
- Heightened risk profile gold margins rise to 8.8% from 6.6%
- Silver margins climb to 15% from 11% for standard risk profiles
- Heightened risk silver margins increase to 16.5% from 12.1%
- Similar margin hikes apply to platinum and palladium futures contracts
Convergence of Negative Catalysts
The combination of several factors created a perfect storm for MCX and precious metals:
- Strengthening US dollar outlook reducing safe-haven appeal
- Significant margin hikes increasing trading costs
- Extreme price volatility following record highs
- Budget-related caution ahead of Union Budget 2026 announcements
This convergence triggered heavy unwinding of precious metal positions, which directly impacted MCX shares during the special trading session. Market participants remained particularly cautious as they awaited policy directions from the upcoming Union Budget, adding to the prevailing uncertainty in commodity markets.
