Financial market concerns about rising inflation and the appearance of the Omicron variant of Covid-19, triggered the fear index (VIX) on Friday to 54.04%, compared to the previous day, taking it to levels of 28.62 points, a floor that has not been seen since last February.
Alejandro Padilla, deputy general director of Economic and Financial Analysis at Banorte, said that the levels reached on Friday reflect the feeling that the markets have entered a moment of “panic”, as a result of the expectation of greater inflationary pressures, the effect that would have the new stimulus package in economic activity, the rise in the prices of raw materials and the new variant of Covid-19.
The Chicago Board Options Exchange Market Volatility Index (VIX) measures the volatility of options of the US S&P 500 index, which in the trading session on Friday closed with a fall of 2.27% to 4,594.62 integers.
“The new wave of infections in the European Union is leading to restrictive measures, which means risks for the economic recovery, triggering a wave of sales in the markets,” said Padilla.
During November, the VIX maintained an average of 17.23 points. However, having rallied significantly in a single day raises concerns that volatility will continue to spread.
However, the current levels of the VIX are still far from the 75.47 integers that it reached on Thursday, March 12, 2020, when the stock markets experienced a day of panic because they did not know what the consequences of the health contingency would be in the economies. This year it advances 25.80% and specialists report that being below 20 points, the index does not reflect concerns.
Reference-www.eleconomista.com.mx