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Why's volatility index India VIX flashing far less fear than before?

The India VIX index, a gauge of volatility in the stock market, has nosedived more than 33 percent after hitting multi-year highs on February 24.

New Delhi / March 29, 2022 / 09:26 AM IST

The dramatic spike in volatility seen a month ago as Russia’s military advanced into Ukrainian territory appears to be subsiding significantly in recent sessions indicating investor confidence on the mend.

The India VIX index, a gauge of volatility in the stock market, nosedived more than 33 percent after hitting multi-year highs on February 24, the day Russia’s President Vladimir Putin announced a “special military operation” in Ukrainian territory.

The decline in the domestic volatility index has been in line with the more actively tracked CBOE VIX index, a marker of uncertainty in US equities. The CBOE VIX index collapsed below the psychologically crucial 20 point mark on March 28, taking its overall losses from the recent high to close to 50 percent.

“Market is attaching less risk to the whole Russia-Ukraine situation and the decline in the index shows that bargain buying is emerging in equities,” said Shrikant Chouhan, executive vice president at Kotak Securities.