India’s VIX Climbs for Record Ninth Day as Stocks Extend LossesSantanu Chakraborty
The benchmark gauge of Indian equity-option prices climbed for a ninth day, its longest stretch on record, as investors sought more protection in a stock market falling amid concern about company earnings.
The VIX Index jumped 3.3 percent to 19.11 at the close in Mumbai, its highest level since Feb. 27. The gauge has surged by more than a third over the nine-day period, including a 27 percent surge this week. The CNX Nifty index lost 1.1 percent to 8,305.25 on Friday. The S&P BSE Sensex also dropped 1.1 percent.
The Nifty has slumped 3.5 percent this week, its second weekly loss, after Infosys Ltd., India’s second-largest software exporter, posted quarterly earnings that missed estimates. Sensex company earnings for the January-to-March period will decline for a second straight quarter, according to estimates compiled by Bloomberg show.
“We have a sell-on-rise view on Indian stocks amid weak quarterly earnings,” Dhiraj Bhutoria, a director at Varun Tradecom Pvt, a Kolkata-based securities brokerage, said in a phone interview. “We expect the Nifty to drop as much as 8,120 in the near term. We are advising buying Nifty 8,200 puts.”
The rally in VIX has come as global investors made net purchases of Nifty index options in six of the previous seven days, data compiled by Bloomberg show.
Infosys’s shares slumped 6 percent to 1,995.20 rupees after the Bengaluru-based company posted a 3.3 percent increase in its fourth-quarter net income to 31 billion rupees ($487 million). Quarterly sales rose 4.2 percent to 134.1 billion rupees. The shares have plunged 10 percent so far this month.
Infosys call options with strike prices of 2,200 and 2,100 were the most popular by outstanding contracts, according to data available as of 4:10 p.m. Among put options, the 2,000 contract had the highest open interest.
The Nifty is valued at 15.3 times its 12-month projected earnings, compared with a five-year average multiple of 14.3. The MSCI Emerging Markets Index trades at 12.7 times.