NSE volatility index falls to lowest level

The volatility index, India VIX, depicts the expected market volatility over the next 30 calendar days. The index moves up when there is a fear among investors that the 50- share Nifty index will move down and volatility index tends to move down when investors are confident that the market have strength to trade upwards.

The volatility index today touched its fresh low at 16.74 points during intra-day trade though it settled at 18 points, down 0.61 per cent as the market took a smart recovery at the fag end of the trade. Last time the index had hit this level was on On August 4.

"The index today settled down which implies that the Indian market has strength. The market opened on the weak note but later on it saw a smart recovery, which helped the Nifty to settle marginally down, and pulled the volatility index in red, reflecting investors confidence in the Indian share market," SMC Global vice president Rajesh Jain said.

The 50-share index Nifty closed down 0.08 per cent at 5,416.45 points. During the trading hours, the index went to a high at 5,431.10 points and fell to a low of 5,372.45 points.

"The fall in the volatility index reflects bullish trend in the stock market and the investors bullishness in the market. This is a good sign for the market as well as for the investors," CNI Research CMD Kishore P Ostwal said. NSE launched its volatility index on a real time basis last month.