Does rising India VIX mean a rising tide against BJP's win in Lok Sabha Election 2024?
Lok Sabha election 2024: India VIX, also known as the Indian Volatility Index, is a measure of the market's expectation of volatility over the near term. Today, it continued its uptrend and touched a new 52-week high of 21.88.
While climbing to this new 52-week peak, the volatility index of the Indian stock market logged a nearly 67 percent rally in one month. This continuous rally of the India VIX Index from the 10.20 mark (23rd April 2024) to 21.88 today, the volatility index has put doubts into the minds of stock market observers whether the India VIX Index rally is a signal of a rising tide against the BJP's victory in the Lok Sabha elections.
Some of the market also believes that rising India VIX Index doesn't mean dent to BJP's victory but a lower than the claimed number of seats by the BJP and its allies. According to stock market experts, the India VIX Index is rising not because of the uncertainty over the number of seats the ruling coalition led by the BJP would win.
Factors like geopolitical tension in the Middle East and rising US Treasury yield are also playing their respective roles in fueling the volatility index. They said that the rising India VIX Index in the last 20 days should be seen as a signal to the market investors that BJP's standalone seats coming below 300 would mean a huge blow to the Indian stock market, and we may see strong selling post-Lok Sabha results if the BJP's seats slump below 300 after the announcement of Lok Sabha election results, scheduled on 4th June 2024.
Providing a historical perspective, Rajesh Sinha, Senior Research Analyst at Bonanza Portfolio, points out that the India VIX Index's current movement is not unique to this election cycle. He recalls that the India VIX had
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