India VIX, representing volatility in the markets in the short term, scaled to a one-month peak of 17.6 in early trade. This is owing to fresh round of tensions engulfing the Indian state of Jammu and Kashmir and the more recent escalation in US-China trade war situation.
It is to be noted that VIX or volatility index highlights the degree of volatility expected for the next 30 calendar days.
As of 10:55 am, the Sensex, Nifty was dragged lower by 1.5% each while the Nifty Bank fell the most by 2.5% led by SBI which went down after the stock was downgraded by one of the credit rating firm.
Amid the trade war chaos, which once again spooked global economic growth concerns, Asian markets were trading at 6-month lows.
Also, beefing up of security in the state of J&K amid an increase in hostility along the LoC with Pakistan is fuelling fresh trouble. FPI sell off continues and as per the depositories data, FPIs pulled out a net sum of Rs 2,632.58 crore from equities and Rs 248.52 crore from the debt segment during August 1-2, taking the cumulative net outflow to Rs 2,881.10 crore.
Another deterrent has been the sluggish sales in the auto market which has been also weighing on the investor sentiment.