BackGold impact: MCX shares surge to record highs
Morgan Stanley raised its target for MCX from ₹1,600 to ₹2,000, citing strong balance sheet and high dividend payout
PremiumGold’s record-breaking rally has pushed shares of MCX, India’s biggest commodities exchange, to record highs. On BSE, shares of MCX today rallied as much as 5% to a new high of ₹1,792. Surging gold prices have boosted expectations that trading volumes in gold futures on the bourse will jump.
MCX, which derives more than a third of its revenue from the precious metal segment, last week reported a 29% jump in the June-quarter profit. Morgan Stanley raised its target for the stock from ₹1,600 to ₹2,000, citing strong balance sheet and high dividend payout.
Supported by a negative real yields and a weaker dollar and concerns over rising coronavirus cases, spot gold prices rose to an all-time high of $1,980 per ounce on Tuesday. In India, gold prices on MCX have inched closer to ₹52,846 per 10 gram.
While physical demand for the metal in key hubs like India and China have suffered because of higher prices, investors have poured money into avenues such as exchange-traded funds or ETFs to benefit from the rally.
In late trade, MCX shares gave up some gains and were trading 0.6% higher at ₹1716.
Shares of gold loan companies like Manappuram Finance and Muthoot Finance have also rallied strongly over the past few months, tracking a rally in gold prices. (With Bloomberg inputs)
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