India VIX surge keeps many wary ahead of RBI policy

Thu May 2, 2013 2:56pm IST

A broker reacts while trading at a stock brokerage firm in Mumbai November 6, 2008. REUTERS/Arko Datta/Files

A broker reacts while trading at a stock brokerage firm in Mumbai November 6, 2008.

Credit: Reuters/Arko Datta/Files

Related Topics

Stocks

   

Reuters Market Eye - NSE's volatility index, or India VIX, adds 10.7 percent to 16.72, heading for a third straight session of gains, reflecting the rising volatility ahead of the central bank's policy review on Friday.

India VIX measures the cost of protection via options and is seen by some investors as a "fear" gauge.

As of 2:09 p.m., India VIX was up the most in a day since September 17, 2012.

The India VIX is rising at a time when the Nifty crossed the psychologically important 6,000 level, the first time since February 4, keeping many wary of profit-taking on policy day, dealers said.

The Reserve Bank of India is likely to cut interest rates on Friday for a third time this year, drawing comfort from a fall in inflation as it seeks to help lift the economy from its lowest growth in a decade, according to a Reuters poll.

As of Tuesday's close India VIX had a negative correlation of 61 percent with NSE stock index.

"The risk for long positions is increasing as depicted by India VIX, people are buying more puts than calls," said AK Prabhakar, senior vice president at brokerage AnandRathi.

If Nifty does not close above 6,035 on Friday then it can decline till 5,775 level, Prabhakar added.

(Reporting by Abhishek Vishnoi)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

India-WTO Row

REUTERS SHOWCASE

Market Eye

Market Eye

Nifty falls most in nearly 3-1/2 weeks; Sensex down over 400 points  Full Article 

Factory Activity

Factory Activity

Factories post fastest growth for 17 months in July  Full Article 

Paying for Bail

Paying for Bail

Jailed Subrata Roy gets office to negotiate hotel sales.  Full Article 

Rupee Dips

Rupee Dips

Rupee posts biggest weekly loss since record lows in August.  Full Article 

Reviving Infosys

Reviving Infosys

CEO Sikka says to improve business with new growth avenues  Full Article 

Outlook Slashed

Outlook Slashed

ArcelorMittal cuts outlook as ore prices hit mining  Full Article 

Re-gaining Momentum

Re-gaining Momentum

China, Asian factory growth gathers pace; Europe falters  Full Article 

Factory Lockout

Factory Lockout

Pfizer says threats to managers force staff lockout at Mumbai factory .  Full Article 

Gold Smuggling

Gold Smuggling

In cat-and-mouse game, India uncovers new gold smuggling route.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage