MCX gallops after launching India's first base metal index

MCX rose 2.30% to Rs 1,782.55 after the trading platform introduced futures trading on the country's first tradable real-time base metals index, MCX iCOMDEX Base Metal.

MCX said it has launched MCX iCOMDEX Base Metal (METLDEX) futures expiring in the months of November 2020, December 2020 and January 2021. Atleast 3 consecutive month contracts will be available at all times. The contract has a lot size equal to 50 times of underlying. The tick size (minimum price movement) for the contract is Re 1. The contracts would finally be settled in cash at the end of expiry of each contract. The final settlement price will be based on the Volume Weighted Average Price (VWAP) of the underlying constituents between 4:00 PM and 5.00 PM on the expiry day of the index futures contract.

The sectoral index tracks real-time performance of a basket of MCX Base Metal (near month) futures that includes Zinc (5 MT), Copper (2.5 MT), Nickel (1.5 MT), Lead (5 MT) and Aluminium (5 MT) futures. Presently it carries around 33.06% weight for Zinc, 29.81% for Copper, 14.77% for Nickel, 12.88% for Lead and 9.48% weight for Aluminium.

Commenting on the latest addition, P.S. Reddy, the managing director (MD) & chief executive officer (CEO) of MCX, stated that: "After successful launch of bullion index futures, we are glad to introduce METLDEX futures that will further strengthen commodities as asset class in the country. Index trading will facilitate instant portfolio diversification and encourage passive, thematic elements in portfolios. The Index will soon emerge as a new real time barometer for Indian metal industry."

The announcement was made during trading hours today, 19 October 2020.

MCX's consolidated net profit jumped 29.1% to Rs 56.43 crore on 8.1% decline in net sales to Rs 73.01 crore in Q1 June 2020 over Q1 June 2019. The company is engaged in facilitating trading, and clearing and settlement of commodity derivatives. It operates as a commodity futures exchange.

The stock is trading 4.11% below its 52-week high of Rs 1,859 hit on 14 September 2020. The scrip has galloped 121.42% from its 52-week low of Rs 805.05 hit on 25 March 2020.

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