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.
National Stock Exchange on Monday announced the launch of India VIX, a volatility index being disseminated on a real-time basis for the first time.
Indian benchmark equity indices, Sensex and Nifty, closed lower for the fourth consecutive session, driven by a surge in crude oil prices above USD 114 per barrel due to escalating tensions in West Asia, coupled with broad-based selling and FII outflows.
Indian equity markets, led by the Nifty 50, saw gains following a pullback in Brent crude prices towards $101-102 a barrel and weaker-than-anticipated US jobs data, which eased concerns about a Fed rate hike. However, analysts caution that markets are likely to remain volatile in the near term.
The National Stock Exchange has launched a volatility index reflecting the market's expectation of volatility over the near term, which is the next 30 day period. From the best bid-ask price of Nifty 50 Options contracts, a volatility figure (percentage) is calculated, which indicates the expected market volatility over the next 30 days. Higher the implied volatility, higher the India VIX. Implied volatility refers to the implied risks associated with the stock markets.
The benchmark Sensex plummeted 813 points to a three-month low, with the Nifty settling below 23,450, as escalating tensions in West Asia drove crude oil prices above USD 100 per barrel, leading to widespread selling in IT, FMCG, financial services, and oil & gas shares.
The Nifty 50 experienced significant volatility during its closing auction session, leading to losses for both long and short retail options traders due to thin liquidity and rapid price swings, particularly in private-sector banks.
Indian benchmark stock indices Sensex and Nifty rallied for the second consecutive day, closing nearly 1 per cent higher, driven by gains in metal and auto sectors and positive global market trends.
Stock markets rebounded on Friday with the benchmark Sensex closing higher by 316 points after heavy buying in banking and metal shares amid optimism over trade deal progresses and India's participation in Pax Silica.
'Despite the current uncertainties, the long-term outlook remains constructive due to strong fundamentals, government initiatives, and a stable banking sector.'
'Buy on dips, buy on dips and sell on rise.'
The BSE Sensex plummeted 1,236 points, wiping out nearly Rs 7 lakh crore in investor wealth, driven by escalating tensions between the US and Iran and subsequent market selloff.
Indian equity benchmark indices Sensex and Nifty tumbled over 1 per cent for the third consecutive day, driven by a sharp rally in crude oil prices, massive selling in IT stocks, and unabated foreign fund outflows amid ongoing geopolitical tensions in the Middle East.
Indian benchmark equity indices Sensex and Nifty experienced a significant crash in early trade, triggered by a sharp increase in crude oil prices and escalating tensions in the Middle East.
Among the Sensex constituents, Eternal, Tata Steel, Kotak Mahindra Bank, UltraTech Cement, Maruti Suzuki India, Sun Pharmaceuticals, Tech Mahindra, HDFC Bank, Tata Motors Passenger Vehicles, Infosys, Trent, Mahindra & Mahindra, Reliance Industries and HCL Technologies were the gainers. However, Asian Paints, Bharti Airtel, Bajaj Finance, PowerGrid, Axis Bank, ICICI Bank and Titan were among the laggards.
Market chatter suggests that the BJP could win fewer than 300.
According to a report by BofA-ML, capital markets are 'usually jittery prior to the declaration of election results as it is uncertain about the outcome'.
Under its new chairman Tuhin Kanta Pandey, the Securities and Exchange Board of India (Sebi) has gravitated towards greater transparency and ease of doing business, setting an objective of "effective and optimum" regulation. On Monday, during its first board meeting under Pandey, the regulator has decided to constitute a high-level committee (HLC) to review conflicts of interest and unveiled initiatives to simplify regulatory processes.
'It is advisable to stay away from the markets for now and buy only on a dip.'
On a five-day rolling basis, FPI selling is the highest in 24 years.
'The economy is clearly at a very soft spot, and earnings growth is disappointing every day.' 'After three great years, the Indian economy has hit a rough patch.'
Investors' wealth jumped Rs 13.78 lakh crore on Monday as the benchmark equity index Sensex hit its lifetime high after exit polls predicted a massive win for the BJP-led NDA in the Lok Sabha polls. The 30-share BSE Sensex jumped 2,777.58 points or 3.75 per cent to hit a record peak of 76,738.89 in early trade. The benchmark finally ended at 76,468.78, registering a sharp rally of 2,507.47 points or 3.39 per cent.
'Market corrections are a natural part of investing, so it's essential to remain focused on long-term financial goals.'
Foreign portfolio investors (FPI) have pulled out $3.5 billion from India's equity markets so far this month. The selling comes on the back of election-induced volatility and the rotation of flows from India to China, where stocks are available at half the valuations. If the selling pressure remains at the current level, this will be the highest FPI pullout since January 2023.
Mumbai -- home to industry titans and Bollywood stars -- is witnessing a slow offtake of houses priced between Rs 10 crore and Rs 50 crore. Industry insiders and real estate watchers explain why.
India VIX has been mirroring the CBOE Volatility Index.
From the Sensex basket, Asian Paints, Sun Pharma, HDFC Bank, Tata Consultancy Services, Axis Bank, Tata Steel, JSW Steel, Larsen & Toubro, ICICI Bank and Power Grid were the major gainers. Tata Motors dropped over 8 per cent despite reporting over three-fold jump in consolidated net profit at Rs 17,528.59 crore for the fourth quarter ended March 31, 2024. NTPC, Bharti Airtel, Titan, State Bank of India and Nestle were the other major laggards.
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.
Markets rebounded to end marginally higher on value buying at lower levels.
Markets ended at fresh all-time closing highs, led by aggresive buying in capital goods and bank shares.
Realty, consumer durables, capital goods lead losses, Broader markets underperform.
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.
A majority of economists predicted RBI Governor Raghuram Rajan would leave policy rates unchanged on Tuesday and expected a dovish commentary, as crude oil prices and inflation cool off.
'Investors need to be stock specific and should not rush to buy stocks at the current levels.'
Market experts predict that the equity markets are likely to remain volatile for the rest of the year.
Nifty advanced 46 points, at 5,833.
Other markets in Asia also ended in higher except Japan which closed flat due to uncertainty over the nuclear plant and economic recovery.
Overall market reaction to the Budget was neutral. Investors absorbed the changes to the tax rates (positive for salaried class) and capital gains taxes (CGTs, negative due to the removal of indexation and increases. Other proposals largely pertain to supporting rural development, buybacks taxed as dividends, Custom duty changes that impact multiple sectors, higher outlays for clean energy, etc. There's some moderation in the growth of capex outlay across defence, fer
'We emphasise the importance of not basing investment decisions solely on electoral outcomes.' 'Instead, focusing on investing in high-quality businesses capable of prospering regardless of the political landscape is paramount.'
Options data indicates that markets will experience extreme volatility till a clear trend on election results emerges
