India VIX Jumps Most in Five Months After Foreigners Buy OptionsSantanu Chakraborty
India’s benchmark gauge of protection against stock-market swings surged by the most since May after the longest stretch of option purchases by foreigners in 21 months.
The India VIX Index jumped 13 percent to 16.4 in Mumbai, the highest close since July 9. Overseas investors bought a net $76.5 million of CNX Nifty Index options on Oct. 14, an 11th day of purchases and the longest streak since January 2013, data compiled by Bloomberg show.
“Volatility will continue to rise and India VIX may rise to 25 if there’s a global sell off,” Sahaj Agrawal, deputy vice president of derivatives at Kotak Securities Ltd., said in a phone interview from Ahmedabad. “We are advising investors to book profits with every rise and not add long positions.”
The 50-stock Nifty Index slid 1.5 percent to 7,748.20 at the close, the lowest close in two months. The MSCI Asia Pacific Index lost 1.3 percent, poised for its lowest level since March 25, amid concern Europe’s economic woes may scupper global recovery and as crude oil extended losses.
Foreigners have sold $297.6 million of local shares this month, paring inflows in 2014 to $13.5 billion, still the most among eight Asian markets tracked by Bloomberg.