MCX, BSE shares fall up to 5.5%, extend losses to 4th day; here's why

MCX, BSE stock: Shares of Multi Commodity Exchange (MCX) and BSE traded under pressure on Tuesday, extending their losses to a fourth straight session.  Analysts said that both stocks fell in trade as the Reserve Bank of India's (RBI) revised capital exposure norms, which came into effect on July 1, weighed on trading volumes.  Additionally, a recent Jefferies report ahead of the National Stock Exchange's (NSE) IPO has also weighed on sentiment around BSE and MCX. 

NSE, the note said, remains more profitable than BSE due to its stronger equity options business. Excluding one-off Securities and Exchange Board of India (Sebi) settlement costs, NSE's normalized operating Ebitda margin remained stable at 76-77 per cent during FY24-FY26. READ ABOUT IT HERE

 

 

MCX shares opened lower at ₹32,730 and slipped to an intraday low of ₹32,577.50, down 5.35 per cent. Similarly, BSE shares opened in the red at ₹3,820 and declined to a low of ₹3,630.60, down 4.52  per cent, during the session.

 

Over the past four trading sessions, MCX shares have declined nearly 10 per cent, while BSE has fallen around 8 per cent over the same period.

 

Notably, the updated capital exposure norms involve how banks extend credit to stockbrokers and other capital market intermediaries. The new norms are aimed at barring bank finance for proprietary trading by brokers.  Check - TOP GAINERS NSE | TOP LOSERS NSE   

What is proprietary trading?

 

Proprietary trading refers to trades done by brokers and other financial institutions using their own capital. In other words, proprietary trading involves financial institutions like stock brokers using their own funds to trade and earn profits.  

 

Analysts said that the impact on the market because of the new norms is visible with a drop in trading volumes. Post implementation of the new norms, volumes on BSE on the first two trading days in July fell between 7 per cent and 10 per cent compared to the same days in the previous week.

 

The options premium average daily turnover (ADT) for MCX fell nearly 40 per cent to ₹5,632 crore in the first three trading days in July, compared to ₹9,338 crore in the previous month.

 

Sunny Agrawal, head of fundamental research at SBI Securities, said that MCX's overall ADT has dipped due to new Bank Guarantee (BG) rules from the RBI, where BG issued to brokers must now be backed by 100 per cent collateral against 50 per cent previously. Options Notional ADT has declined 71 per cent M-o-M while Options Premium average daily turnover (ADTO) is down 40 per cent M-o-M.

 

"Impact of the new BG norms is higher than expected. Although it is too early to ascertain the structural impact from the new regulations and the trend of decline in ADT need be monitored over next few weeks," he said, adding that near-term ADT trend uptick would be a key monitorable for fresh entry.  NSE outpaces BSE, MCX in product mix: Jefferies Jefferies on capital market players  Another factor that has added to the negative sentiment in BSE and MCX shares on Tuesday was the Jefferies report. The IPO-bound National Stock Exchange (NSE), the note siad, has a more diversified product mix than BSE and MCX, and accounts for more than 90 per cent share in most categories. It added that NSE has built a tech product suite similar to the global peers and is expanding in commodities.  "It appears to be the most diversified exchange offering equity cash, index options, single stock options, equity futures, commodity F&O, bonds, and currency derivatives. NSE has >90 per cent market share  in most categories except index options and commodity F&O," Jefferies said.   "NSE also has a suite of technology/data offerings, which accounted for 13 per cent of its FY26 revenues, and is expanding its presence in commodity F&O," the note added.  According to Jefferies, NSE's higher clearing market share and premium to notional turnover in equity options has resulted in higher profitability relative to BSE. NSE's clearing corporation accounts for 88 per cent market share in cash and 91 per cent market share in F&O, according to the report.   NSE is targeting to launch its IPO, estimated at around ₹30,000 crore, in September. The listing will bring all three major exchange operators onto Dalal Street.  ========================================================== 

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