A trader reacts while working in a brokerage house in Mumbai, India. (Photographer: Prashanth Vishwanathan/Bloomberg News)

Volatility In India VIX Jumps To 3-Year High

The India Volatility Index shot up to a three-year high of 24.05 on Monday, amid rising uncertainty over the new government formation and soaring crude oil prices.

The India VIX, the fear gauge for domestic equities, rose 5.76 percent to settle at 24.05, after an intra-day high of 24.56.

“Crude and election uncertainties is pushing the India VIX up,” IIFL co-promoter and MD R Venkataraman told PTI.

Besides the ongoing Lok Sabha elections, market sentiment was hit as macroeconomic worries resurfaced, following reports that the U.S. will end sanctions waiver on Iranian oil imports, analysts said.

Global benchmark Brent crude climbed to a multi-month high of $73.81 per barrel, a 2.56 percent rise.

Also read: Oil Jumps as U.S. Plans to End Iran Waivers After May 2 Expiry

“The Nifty and Bank Nifty index has witnessed profit booking in the last couple of sessions, and a rise in the volatility index could lead to some roller coaster activity in the short term,” said Ruchit Jain, an analyst with Angel Broking.

On April 22, 2016, the volatility index reading was 16.38, while in the same period of 2017 and 2018, it was between 12 and 14.

Also read: Sensex, Nifty Log Worst Day Of 2019 On Rising Oil Prices