‘Fear Index’ zooms 15% in 1 day

It touched its lowest ever level of 15.28 in the early part of the session today after opening at 17.09,but ended 14.86 per cent higher at 19.63.

The reading of 15.28 was the lowest ever on the India VIX since the barometer was launched by the National Stock Exchange on a real-time basis on July 19. In addition,today’s jump of nearly 15 per cent was its steepest rise in a single day.

The index depicts the expected market volatility over the next 30 days,with the higher the India VIX value,the higher the expected volatility and vice-versa.

“There is a nervousness-like situation among investors and in that scenario,markets are likely to be highly volatile in the coming sessions,” Geojit BNP Paribas Research Head Alex Mathews said.

The index moves up when there is a fear among investors that the 50-share Nifty index will move down and the volatility index tends to move down when investors are confident that the market has the strength to trade upwards.

Analysts said the outlook for the equity market remains weak.

“Global markets are not stable nowadays and in such a scenario,local bourses are also expected to behave in the same fashion,” said an analyst.

On the global front,the Dow Jones moved below the psychological 10,000-level on the back of weak economic data which came out recently.

Investors were also jittery ahead of the GDP and consumer confidence numbers of the US which are expected to show that the US economy slowed in the second quarter.

In Asian markets,Japan’s consumer price fell for the 17th month and household spending rose less than forecast.

The NSE’s benchmark Nifty today plunged by 69.20 points,or 1.26 per cent,to settle at 5,408.70.