The NSE VIX closed at 24.59, the level last seen during the May 2014 Lok Sabha elections
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Mumbai: While the equity markets have recovered from their one-year low touched on August 24, the underlying sentiments remain highly nervous on account of uncertainties regarding an interest rate hike by the US Federal Reserve and Chinese economic slowdown.
This could be gauged by the fact that India’s volatility index (VIX), which measures investors’ expectation about the near term volatility jumped 5 per cent for the second consecutive day suggesting that traders are aggressively buying Nifty option contracts as an effective hedge against any unexpected fall in the market. The NSE VIX closed at 24.59, the level last seen during the May 2014 Lok Sabha elections.
On Monday, the Sensex closed at 26,283.09, losing 109.29 points or 0.41 per cent while the Nifty dropped 30.65 points or 0.38 per cent to end the day at 7,971.30. Both equity indices posted their biggest monthly loss since November 2011. “Due to a lot of uncertainties regarding a rate hike by the Fed, a large number of traders are buying Nifty options contract. This is the reason why the VIX is climbing higher. At the moment, the street is completely divided on the further direction of the markets, said Siddarth Bhamre, head, derivatives at Angel Broking.
( Source : deccan chronicle )
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