The India Vix, a gauge for market volatility, posted its steepest fall in five years on Tuesday and finished close to record low levels. Analysts said markets may have factored in continuation of the current regime in the general elections. Easing of geopolitical tensions after Israel’s relatively muted response to Iran’s drone and missile strikes may have also contributed to the index declining 19.7 per cent to end the session at 10.2.
This was the steepest correction since May 23, 2019, when the results of the 17th Lok Sabha elections were declared, and was the 12th biggest single-day fall for the index since 2008. Unlike now, almost all the bigger declines have largely occurred on elevated Vix levels.