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23 Jun 2016

Market Volatility Hits 4-Month High

Market Volatility Hits 4-Month High


The VIX Index measures the 30-day implied volatility of the S&P 500 index options and is considered a key gauge of market fear.


On Wednesday, June 22, the VIX finished up 14.6% at 21.2, the highest level since Feb. 18. The surge also breached its long-term average level of 20. Market participants saw the jump in the VIX on Wednesday — the day before the referendum — as reflecting increased anxiety and expectations for potential volatility in U.S. stocks this summer.


The nervousness among investors sent U.S. stocks sharply lower Wednesday, defying a strongly higher open and mirroring losses in European bourses. A more-than-$1 drop in the price of crude oil also weighed on energy shares and the major U.S. indexes.


The VIX last traded above 32 in August 2015, when concerns over a slowdown in China roiled markets. Risk assets such as stocks and crude oil tumbled, while safe havens like the yen and gold rallied sharply as fear gripped the market. At the time, crude oil was trading below $30 a barrel, while gold was rallying from below $1,100 an ounce.



(Source: Monexnews.com-AS)

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