India’s financial markets have been witnessed extreme volatility since the onset of May 2024 – the month that marks the crucial last phases of polling for the high stakes’ Lok Sabha elections, followed by the counting of votes and results on June 4, 2024. A lower voter turnout so far in poll phases has raised concerns whether Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP) and its allies can achieve the landslide victory predicted by opinion polls last month.
Investors had already priced market stability over BJP returning to power, however, the current volatility has raised concerns of uncertainty. This has subsequently led to a significant change in the market’s fear gauge index — ‘India VIX’—which gained 386 percentage points during last week to touch 18.47, a 19-month high.
In the week ended May 10, the frontline indices logged their worst since mid-March, dropping about 1.8 per cent each and also snapped two straight weeks of gains. On a weekly basis, the BSE benchmark tanked 1,213.68 points or 1.64 per cent, and the Nifty 50 declined 420.65 points or 1.87 per cent.
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Published: 11 May 2024, 07:43 PM IST
