INDIA VIX up 14% amid rising Middle East tensions; points to increased volatility going ahead
The index symbolic of the degree of volatility has flared up in the wake of worsening geo-political situation.
The Indian markets started Thursday's session sharply lower on the expiry day given the escalating geopolitical tensions. Nifty has tumbled below 24,400 levels and the BSE Sensex plunged 1,430 points. Meanwhile, it has been a sea of red, with the most impact seen on the auto and realty pack given the global worries emanating from the risingMiddle East tensions.
Reportedly, Israel airstrikes and bombardments continue on Lebanon and amid it thousands of Lebanese citizens have become homeless, while some people are also fleeing to Syria as Israel is targeting the residential areas in Beirut.
The sharp fall led the volatility index INDIA VIX to jump nearly 13 per cent to 13.51. The index ended at 11.99 in the previous session.
TRIVESH D, COO, Tradejini said the India VIX, a measure of market volatility, jumped 11.4%, reflecting growing uncertainty. As the situation unfolds, markets could remain volatile and it’s still unclear how global dynamics will change in the coming day, he added.
Earlier before today's sharp gains on the index, INDIA VIX climbed ahead of the Fed's decision on rate cut in September.
Atul Parakh, CEO of Bigul said, "The India VIX is rising due to a convergence of domestic and international causes. Escalating Middle East tensions, notably Israel's activities in Lebanon, have rattled global markets. This international turbulence corresponds with dramatic falls in local indexes, with the Nifty falling below 24,400 and the Sensex dropping more than 1,400 points."
The expectation of future Federal Reserve rate decisions has heightened market anxieties. This perfect storm of global unrest, sector-specific pressures, and monetary policy uncertainty has pushed the volatility index up by more than 13%, from 11.99 to 13.51
This rise underscores rising market nervousness and hazy near-term outlook, as investors cope with a complicated web of dangers ranging from local economic issues to global instability. added Parekh.
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