Mumbai: India’s benchmark gauge of option costs climbed for a third day after foreigners bought more protection against swings in the equity market and stocks declined.

The India VIX Index rose 0.1% to 20.70 at the close in Mumbai after climbing as much as 5.9% earlier on Thursday. The CNX Nifty index fell 0.1% to 8,224.20 and the S&P BSE Sensex lost 0.2% to 27,206.06. Global investors bought $77 million of index options on Wednesday, a fifth day of net purchases, in addition to $10 million of stock options, according to data compiled by Bloomberg.

Foreigners have been buying options even as they sold stocks in 12 of the past 13 days through Tuesday, amid concern earnings growth will slow and the passage of bills will be delayed in parliament. They have sold $761 million of local shares in May, the most among Asian markets tracked by Bloomberg, paring this year’s inflows to $6.5 billion.

“Foreigners are selling in the cash segment due to portfolio rebalancing and near-term uncertainty on policies," Chandan Taparia, a derivatives analyst at Anand Rathi Financial Services Ltd in Mumbai, said in a phone interview. “We expect volatility to continue until the expiry" of derivative contracts for May delivery, he said.

The Sensex has risen or fallen by more than 1% in each of the previous four days, boosting the 15-day volatility index to the highest level since September 2013, data compiled by Bloomberg show.

Nifty 8,500 call options and 8,000 puts were the most popular by the number of outstanding contracts. Nifty May futures declined 0.2% to 8,238.70. Indian equity derivatives expire on the last Thursday of each month. Bloomberg