Stock market today: Why is India VIX Index skyrocketing during Lok Sabha elections?

Why is the India VIX Index skyrocketing?

Speaking connected the reasons for the rising Indian VIX today, Amit Goel, Co-Founder & Chief Global Strategist astatine Pace 360, said, "The India VIX has been expanding for the past fewer days, attributed to planetary and home factors. The superior origin is the upcoming Lok Sabha elections successful India, scheduled for announcement of results connected June 4th, 2024. Investors are jittery astir the result and the imaginable interaction connected the markets, frankincense driving the VIX up. Historically, the VIX tends to emergence successful the lead-up to elections owed to this uncertainty. Alongside the home event, planetary factors specified arsenic the US Federal Reserve's involvement complaint decisions and caller selling by overseas investors are besides contributing to the emergence successful India VIX."

On however India VIX Index is connected to the Indian banal marketplace today, Avdhut Bagkar, Derivatives & Technical Analyst astatine StoxBox, said, "the INDIA VIX fails to chill disconnected and descent beneath 16 levels, we could spot much selling unit successful the market. Under specified conditions, assertive traders are advised to debar taking overleveraged positions and alternatively question hedging strategies."

India VIX historial data

Anticipating further summation successful the India VIX Index, Sumeet Bagadia, Executive Director astatine Choice Broking, commented, "The India VIX is presently successful the 17 to 19 range, facing absorption astatine the 19 level. It retraced from this level successful the Thursday and Friday sessions. Once it overcomes this resistance, it is apt to interaction the 22 level successful the adjacent future." This forecast tin usher investors successful their decision-making process.

Despite the emergence successful the India VIX, Sumeet Bagadia, Executive Director astatine Choice Broking, maintains a affirmative outlook. He sees it arsenic an denotation of the fearfulness origin existing successful the Indian banal marketplace up of the Lok Sabha predetermination results, scheduled connected 4th June 2024. However, helium reassures that the fearfulness origin is manageable, and specified a emergence is expected for Dalal Street investors. He points retired that the India VIX Index, which measures the market's anticipation of volatility implicit the adjacent 30 days, touched a precocious of 39.30 during the 2014 Lok Sabha elections, whereas it touched the astir 30 people during the 2019 Lok Sabha polls. He further elaborated that India's VIX surged to 92 levels during the banal marketplace clang successful 2008, whereas it touched 86.63 peaks erstwhile the Indian banal crashed successful 2020 aft the outbreak of the COVID pandemic.

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Published: 10 May 2024, 02:01 PM IST