• UGI USER
  • May 15, 2024
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“NAVIGATING MARKET TURBULENCE: UNDERSTANDING INDIA VIX SURGE IMPACT”

Why in the news?

  • India VIX, a key indicator of market volatility, spikes above 21 amidst election uncertainty and foreign investor sell-offs, prompting caution among traders and investors.
  • Rising India VIX reflects heightened fear and expected market turbulence, impacting investment strategies and prompting vigilance during the ongoing market correction.

About Volatility Index(VIX):

  • Measures near-term market volatility expectations.
  • Represents the rate and magnitude of stock price or index value changes.
  • Known as the ‘fear gauge’ due to its reflection of market sentiment.

India VIX:

  • Launched by NSE in 2010.
  • Indicates Indian market volatility from investors’ viewpoint.
  • VIX rise suggests market decline, and vice versa.
  • Key factor in pricing options contracts, a popular derivative instrument.
About NIFTY:

  • Introduction: Market index introduced by the National Stock Exchange (NSE).
  • Origin: Coined from “National Stock Exchange” and “Fifty,” signifying its 50-stock composition.
  • Evolution: Established as CNX Nifty in 1996, rebranded as Nifty 50 in 2015.
  • Benchmark Index: Represents the performance of the 50 largest and most traded stocks on the NSE.
  • NIFTY 50 is a key benchmark and flagship index of the NSE, alongside BSE’s SENSEX, representing India’s stock market dynamics.