Stocks recover, but volatility persists

Fear factor

- Mayur Bhalerao

India's equity markets sprung back Tuesday from the previous day's crash, but the country's 'fear gauge' remains in dispirited territory, signaling that investors might be in for another few weeks of uncertainty and instability.

The India Volatility Index surged 65.7% on Monday to 22.8—its highest spike since its inception in 2007. On Tuesday, the gauge dropped to 20.44, but was up by about 47% over five trading days as US President Donald Trump unleashed a global trade war last week.

India VIX reflects the market's expectation of volatility in the benchmark Nifty 50 index over the next 30 days and is widely regarded as a barometer of market sentiment.