India VIX Declines From 15-Month High as Stocks Rebound

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India’s benchmark gauge of equity-option costs dropped from a 15-month high as stocks rebounded in a volatile trading session.

The India VIX index fell 4.6 percent to 26.85 at 3:50 p.m. in Mumbai, after it surged 64 percent on Monday. The 50-stock CNX Nifty index rose 1.1 percent to 7,880.70, most in two weeks.

China’s shock devaluation of the yuan this month has sent convulsions through global markets, fueling speculation that the slowdown in the world’s second-largest economy may be deeper than previously thought. Global funds sold $96.3 million of Indian equity-index options on Monday, snapping a 15-day buying streak, data compiled by Bloomberg show.

“There is certainly a fair bit of nervousness and fear,” Peter McGuire, chief market strategist at FS Securities Pty Ltd., told Bloomberg TV India from Sydney. “We will probably see some technical buying over the next day or two and we won’t be surprised if there is further selloff.”

Global funds have pulled $610 million from Indian equities this month through Friday, paring this year’s inflows to $6.5 billion. The Nifty has dropped 7.6 percent so far in August, bound for its steepest monthly loss since November 2011.

Nifty September 8,000 puts and August 8,600 calls had the most number of outstanding contracts, according to data compiled by Bloomberg.

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