The benchmark gauge of Indian equity options advanced to its highest level in two months as the nation’s stocks fell amid a global rout.
The India VIX index jumped 4.8 percent to 17.79 at 11:48 a.m. in Mumbai, headed for its third weekly gain. The CNX Nifty index lost 1.5 percent to 8,247.80, headed for a two-month low. Global investors bought $115.1 million of index options on Thursday, capping a 14th day of purchases, the longest stretch since a 19-day period through July 10, according to data compiled by Bloomberg.
Global funds have pulled $113.5 million from Indian equities this month, contributing to a 3.3 percent slide in the Nifty. Asian stocks plunged with U.S. index futures, extending the worst week for global stocks in nine months, as a gauge of Chinese manufacturing plunged to the lowest since 2009. The rupee weakened 1.3 percent from Aug. 14 to 65.8625 a dollar as of 10:49 a.m. in Mumbai, the lowest level since September 2013.
“We expect volatility to rise amid a global rout and a weak currency,” said Nilesh Karani, vice president at Magnum Equity Broking Ltd. “However, the VIX is likely to cool off next month. We are advising clients to buy Nifty 8,300 calls.”
Nifty 8,200 put options and 8,500 calls had the highest number of outstanding contracts.