India's fear gauge index, India VIX, surged on Wednesday as concerns over geopolitical tensions and rising rates in the U.S. negated support from domestic earnings.
India VIX surged 11.6% to touch the intraday high of 12.1, the highest since Oct. 4. It closed 3.74% higher at 11.3.
The S&P BSE Sensex closed down 523 points, or 0.81%, at 64,049.06, while the NSE Nifty 50 ended 160 points, or 0.83%, lower at 19,122.15.
The NSE Nifty 50 has fallen 3.48% in the last five sessions, whereas the S&P BSE Sensex corrected 3.58% in the same period.
The uncertainties associated with the Israel-Hamas conflict will continue to weigh on markets in the near term, said VK Vijayakumar, chief investment strategist at Geojit Financial Services Ltd.
“Positive news like a decline in U.S. bond yields and weakening crude can help the market revive, but it may not sustain itself given the uncertainty surrounding the West Asian conflict. Investors may opt for a cautious approach to the market until some clarity emerges on the geopolitical situation.”
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