Stock market today: Indian stock markets breathed some sigh of relief in early Friday trading after five consecutive sessions of haemorrhage. However, India’s volatility index, India VIX, remains high. India VIX today started flat at 18.20, but the index quickly gained momentum and reached an intraday high of 18.66. During this rally to an intraday high, the volatility index has registered an increase of about 70% in one month, but among bulls this may not go down well. According to stock market experts, India’s VIX today is rising both globally and domestically. In the domestic market, the main factor pushing up the India VIX index is the ongoing Lok Sabha elections, while global factors include rising US bond yields and geopolitical tensions. They said the volatility index is in the 17-19 range and could soon reach the 22 mark if the upper hurdle is breached.
Why is India’s VIX index soaring?
Explaining the reason for today’s rise in India’s VIX, Amit Goel, co-founder and chief global strategist at Pace360, said, “India’s VIX has been rising over the past few days due to global and domestic factors. . The main factor. is the Lok Sabha election in India, the results of which are scheduled to be announced on June 4, 2024. Investors are nervous about the outcome and the potential impact on the market, which is why he tends to see the VIX rise. In addition to domestic events, global factors such as the US Federal Reserve’s interest rate decisions and recent selling by foreign investors are also contributing to the rise in India’s VIX. ”
Commenting on how the India VIX index relates to the Indian stock market today, Avdutt Bagkal, Derivatives & Technical Analyst at StoxBox, said, “If the India VIX index continues to cool down and falls below the 16 level, there will be further speculation in the market. “Selling pressure may increase.” In such situations, aggressive traders are advised to avoid taking overly leveraged positions and instead explore hedging strategies. ”
India VIX historical data
Expecting further rise in the India VIX index, Sumeet Bagadia, Executive Director, Choice Broking, said, “The India VIX index is currently in the 17-19 range and is facing resistance at the 19 level. We fought back from this level on Friday.” If this resistance is overcome, it is likely to reach the 22 level in the near future. ” This forecast guides investors’ decision-making process.
Despite the rise in India VIX, Sumeet Bagadia, executive director at Choice Broking, remains upbeat. He sees this as a sign of the fear factor that exists in the Indian stock market ahead of the Lok Sabha election results scheduled for June 4, 2024. However, he reassured that the fear factor is manageable and such a rise is expected in Dalal Street as well. investors. He pointed out that the India VIX index, which measures market volatility over the next 30 days, reached a high of 39.30 during the 2014 Sabah elections, but reached a level of nearly 30 during the 2019 Sabah elections. He further said that India’s VIX index had soared to a level of 92 during the 2008 stock market crash, but reached a high of 86.63 during the 2020 stock market crash following the outbreak of the coronavirus pandemic. Explained in detail.
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