The latest spike in the Vix is a sign that investors are visibly rattled by global developments and fear a further drawdown in stock prices, experts said.
The Indian equity market valuation has been moving in tandem with the US 10-year treasury yield. While the benchmark US bond yield has witnessed a nearly 70 basis point decline since the end of October this year, dropping from 4.93 per cent to 4.23 per cent on Friday, the Sensex earnings yield has slipped by nearly 45 basis points - from 4.5 per cent to 4.05 per cent. Previously, Indian equities' earnings yields rose in sync with the US bond yields.
The Chicago Board Options Exchange, the last major private exchange in the US, has filed for an initial public offering with the Securities and Exchange Commission, to raise up to $300 million.
'Indian markets may initially react and follow the pattern of US and other global markets post US elections.'
Markets
VIX is meant to indicate investors' perception of the annual market volatility over the next 30 calendar days. The higher the value, the higher is the expected volatility and vice versa. VIX touched its historical peak of 85.13 on November 17, 2008, in the aftermath of the collapse of Lehman Brothers. In the past five years, it has stayed below 30.
According to experts, the Nifty has continued to form lower top-lower bottom formations, a trend seen in the last five weeks, and witnessed sharp selling towards 9,700 zones.
'People always short-change the resilience of the economy.'
India VIX has been mirroring the CBOE Volatility Index.
Tuesday's was the S&P's worst drop since August 24.
Monday's drop followed an 8.5 per cent slump in Chinese markets.
The Dow has never lost more than 800 points in a day.
Beijing did not announce expected policy support over the weekend
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