VIX Impact on Stock Market Crash: Factors Behind the Tumultuous Day

VIX Influence on Indians in the Stock Market

Today's stock market crash marks a severe downturn, as the Indian benchmark equity indices closed deeply in the red. The VIX, which signifies market volatility, increased by 6.9% to 12.8, signaling alarm among investors. This decline saw the Sensex drop over 1,250 points, with the Nifty50 ending below the 25,850 mark.

Key Elements of the Market Crash

The market capitalization of all listed companies on the BSE fell by Rs 3.55 lakh crore, reaching Rs 474.38 lakh crore. Major contributors to this downturn include Reliance Industries, ICICI Bank, and HDFC Bank, which together dragged the Sensex down by 730 points.

• 1) FIIs shift focus to China: Foreign Institutional Investors (FIIs) moved towards Chinese stocks due to recent economic stimulus measures.
• 2) Geopolitical uncertainty: Ongoing tensions, particularly in the Middle East, impacted market sentiment.
• 3) Nervousness before US data: Investors are anxious ahead of key US economic data and Federal Reserve speeches.
• 4) Interest rate hike pressure from Japan: Potential interest rate changes in Japan are creating additional market concerns.
• 5) FIIs transition to net sellers: Despite offloading equities, total inflows from FIIs for September remain robust.

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