Stock market today: Why is India VIX Index skyrocketing during Lok Sabha elections?
Stock market today: After bleeding for the five straight sessions, the Indian stock market had a sigh of relief as there was some relief rally in early morning deals on Friday. However, the Indian volatility index, India VIX, continues to remain on the higher side. The India VIX today opened flat at 18.20, but the index soon gathered momentum and touched an intraday high of 18.66.
While climbing to this intraday high, the volatility index registered around 70 per cent rise in one month, which may not go down well among the bulls. According to stock market experts, Indian VIX today is rising globally and domestically. In the domestic market, the primary factor fueling the India VIX Index is ongoing Lok Sabha elections, whereas the global factors include rising US Treasury Yields and geo-political tension.
They said that the volatility index is in the 17-19 range, and upon breaching the upper hurdle, it may reach the 22 mark soon. Speaking on the reasons for the rising Indian VIX today, Amit Goel, Co-Founder & Chief Global Strategist at Pace 360, said, "The India VIX has been increasing for the last few days, attributed to global and domestic factors. The primary factor is the upcoming Lok Sabha elections in India, scheduled for announcement of results on June 4th, 2024.
Investors are jittery about the outcome and the potential impact on the markets, thus driving the VIX up. Historically, the VIX tends to rise in the lead-up to elections due to this uncertainty. Alongside the domestic event, global factors such as the US Federal Reserve's interest rate decisions and recent selling by foreign investors are also contributing to the rise in India VIX." On how India VIX Index is connected to the Indian stock market today,
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