BackIndia VIX index drops most in five months as bullish bets rise
The India VIX Index lost 13.47% to 14.2 at close in Mumbai, the steepest drop since 19 May
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Mumbai: The benchmark gauge of Indian option prices fell by the most in five months as traders increased bullish bets on the CNX Nifty Index after Prime Minister Narendra Modi’s party won in two state elections.
The India VIX Index lost 13.47% to 14.2 at close in Mumbai, the steepest drop since 19 May. Traders held eight bearish contracts on the index for every 10 bullish wagers as of 17 October, near the lowest put-to-call open interest ratio in more than three weeks, data compiled by Bloomberg show.
“Chances of a big fall are limited as not too many puts are being written," Bhavin Desai, a derivatives analyst at Motilal Oswal Financial Services Ltd, said in a phone interview. “Though sentiment is upbeat, it is nowhere near the overoptimistic zone."
The victory for Modi’s Bharatiya Janata Party (BJP) in two state polls helps it progress toward greater influence in the upper house of the parliament, where it is in a minority. The government raised natural-gas tariffs and scrapped diesel price controls to curb subsidies on 18 October, building on Modi’s vow to revitalize Asia’s third-largest economy.
The 50-stock Nifty index advanced 1.3% on Monday after four straight weeks of declines. The gauge has risen 25% this year as overseas investors bought $13.2 billion of shares, the most among eight Asian markets tracked by Bloomberg. Bloomberg
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