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[hfe_template id='11223'] [ad_1] The cost of hedging Indian stocks has surged by the most since the onset of the Covid-19 pandemic ahead of the general election’s outcome next week. The NSE India Volatility Index has risen 88% in May, the most since March 2020. In an unusual occurrence, the gauge of options prices kept creeping up even as stocks reached record highs last week. The NSE Nifty 50 Index has since slipped and the so-called India VIX ended at 24.17% on Thursday, near a two-year high. Bloomberg The jump in swings is predictable as investors await the June 4 results. While Prime Minister Narendra Modi is expected to win a third term in office, low voter turnout and reports of close contests in some states have tempered enthusiasm for elections that began on April 19. Read: India’s Equity Rally Hinges on Modi Bettering 303-Seat Tally“As we edge closer to the result, participants do not want to take any risk and are hedging for the ‘just in case’ outcome,” said C...

[hfe_template id='11223'] [ad_1] In the wake of a prosperous CY2023, concerns about a potential market correction surfaced among investors, casting a shadow over CY2024. Overvaluation in some segments of the stocks added to investors’ worries. Some mutual fund houses decided to restrict the fund flows into schemes focusing on small-cap stocks, which in turn played on the investors’ sentiment. The proactive approach of the regulator by asking the mutual funds to carry out a stress test, which acts as a timely nudge. The Reserve Bank of India also stepped in with proactive intervention in non-banking finance companies and payment businesses. All these have served the investors by bringing down the valuation premium the small and mid-cap stocks enjoyed over the Nifty50 index. Volatility, an inherent element of the market, poses a dilemma for inexperienced investors. However, whether volatility serves as a risk or an opportunity depends on the mindset of the investor, partic...