The India Volatility Index (VIX) surged over 50% on Monday, reflecting an intensified sell-off in the market that aligns with broader global trends. The India VIX crossed the 20 mark, jumping 52% in what is the index’s largest single-day increase since August 2015.
Indian Equity Markets in Sharp Decline
Indian equity markets are experiencing a significant correction, with both the Sensex and Nifty 50 falling more than 2% each. The Nifty 50 has slipped below its budget-day low of 24,074, extending its losses as major heavyweights contribute to the downturn.
Asian Markets Lead Global Sell-Off
The global sell-off is being led by substantial declines in Asian markets. The Nikkei 225 dropped over 12%, while trading in South Korea’s Kospi was halted due to a lower circuit limit. The Taiwanese index also fell by more than 8% during Monday’s session.
What does US Futures Indicates?
US futures suggest that the downturn may persist, with Dow Jones futures down over 400 points and Nasdaq futures falling 700 points. This negative sentiment has also adversely affected Indian IT stocks.
Experts on India Vix Outlook
Commenting on India Vix surge Anand James, Chief Market Strategist, Geojit Financial Services said that VIX was not far from record low recently, which magnified the rate of rise today. In absolute terms, we are still way below the VIX seen around the election results.
James also added that that single day spikes in VIX are usually seen corrected quickly. For now, given the present VIX, the 50day SMA at 23860 seems enough to support Nifty, but VIX’s close beyond 27 could change all that.
