Nifty Options Prices Near 3-Month Low on Interest Rate Pause Expectations

Options to protect against losses in
Indian stocks fell to the lowest level since October amid
expectation the central bank will keep interest rates unchanged
and as the rupee strengthened.

India VIX (INVIXN), a gauge of options prices in the S&P CNX Nifty
Index, was 22.64 at 12:15 p.m. in Mumbai, near the lowest since
Oct. 28, data compiled by Bloomberg show. VIX soared 64 percent
last year, its biggest annual gain since 2008 when the Nifty had
its largest-ever yearly decline.

Indian equities are set for their best January since 2001
amid signs Europe will contain its debt crisis and expectation
the central bank will ease its monetary policy to spur growth.
The Reserve Bank of India, which raised borrowing costs seven
times last year to tame the fastest inflation among so-called
BRIC nations, will keep its benchmark rate at 8.5 percent at a
review tomorrow, all 20 economists said in a Bloomberg survey.

“Risk perception has declined sharply and share prices are
getting comfortable,” Ashish Chaturmohta, vice president of
derivatives at IIFL Private Wealth, said by phone in Mumbai
today. “Expectation of a rate pause, and a rising rupee is
giving investors confidence.”

India’s rupee strengthened on speculation international
investors will quicken purchases of the nation’s assets as
inflation slows. The currency gained 0.2 percent to 50.24 per
dollar as of 10:01 a.m. It rose 2.4 percent last week, the most
since the five-day period ended Oct. 28.

Foreign investors raised holdings of domestic debt by $3.2
billion this month to $29.3 billion as of Jan. 19, exchange data
show, and investments in stocks this year reached $1.2 billion.
Inflation slowed to 7.47 percent in December from 9.11 percent
the previous month, government data show.

Offshore funds pulled out $512 million from local equities
in 2011, fueling the 25 percent drop in the BSE India Sensitive
Index and making the rupee that made it Asia’s worst performer.

To contact the reporter on this story:
Santanu Chakraborty in Mumbai at
[email protected]

To contact the editor responsible for this story:
Richard Frost at
[email protected]

Tagged with: , , , , ,
Posted in Sgx Nifty News, Uncategorized

If you find this Website useful, Please Share ...

AutoClose in 20 seconds...