MCX jumps 4% on heavy volume; analyst advises staying away, here's why
Shares of Multi Commodity Exchange (MCX), driven by heavy trading volumes, gained nearly 4 per cent in intraday trade to touch ₹2,889 on the NSE on Tuesday.
 "MCX jumps 4% on heavy volume; analyst advises staying away, here's why")
Shares of Multi Commodity Exchange (MCX) gained nearly 4 per cent in intraday trade to touch ₹2,889 on the NSE on Tuesday, backed by heavy trading volumes. The rise came even as benchmark indices traded in the red, with Sensex and Nifty 50 both down around 0.5 per cent at 1:45 PM.
Over the past one year, the share price of the commodity exchange has soared 75.6 per cent, according to NSE data. In comparison, the benchmark Nifty 50 has declined 3.8 per cent during the same period.
At last check, the stock was trading at ₹2,872, up 3 per cent from its previous close of ₹2,782.10. Today's gains were accompanied by strong trading activity, with 2.4 million shares changing hands on the NSE, compared with the previous session's total traded volume of 1.21 million shares.
According to market expert Ambareesh Baliga, the stock is "bouncing back" after witnessing corrections in the past couple of weeks.
"Softer commodity prices, especially in precious metals, are supporting the stock. Moreover, the correction has made valuations attractive to the investor, prompting value buying in the stock," he said.
Ambareesh said that he is against any fresh buying at current levels as there are no major positive triggers. Also in the near-term, he said that investors' interest could shift to NSE from MCX and BSE as it prepares to list.
“There are no major triggers for investors at present, barring a possible sharp rise in precious metal prices. Investors may consider avoiding the stock at current prices. Further, once the National Stock Exchange (NSE) gets listed, some investor interest could shift from MCX and Bombay Stock Exchange (BSE) to the NSE,” the expert added.
Notably, Jefferies in a recent report had said that the NSE has a more diversified product mix than BSE and MCX, and accounts for more than 90 per cent share in most categories.
NSE is expected to launch its IPO, estimated at around ₹30,000 crore, in September. The listing will bring all three major exchange operators onto Dalal Street.