NSE launches India VIX on real-time basis

The volatility index indicates the investor's perception of the market's volatility over the next 30 calendar days i.e. higher the India VIX values, higher the expected volatility and vice-versa.

National Stock Exchange (NSE) today announced the launch of India VIX, a volatility index being disseminated on a real-time basis for the first time, reports PTI.

India VIX is based on the index option prices of NSE's benchmark index — Nifty.

India VIX is computed using the best bid and ask quotes of the out-of-the-money near and mid-month Nifty option contracts, which are traded on the F&O segment of NSE, the exchange said in a statement in Mumbai.

The volatility index called the India VIX indicates the investor's perception of the market's volatility in the near term. It depicts the expected market volatility over the next 30 calendar days i.e. higher the India VIX values, higher the expected volatility and vice-versa.

So far, the volatility index, which is expressed in a percentage figure, was shown at the end of the day. But now it will be displayed on a real time basis, the NSE release said.

"Once India VIX is available for trading after regulatory approvals, it will give a lot of security to investors and traders, who face uncertainty, because the new product will empower them with better information and foresight. More importantly, it will give them the ability, to use the product to hedge their portfolios against the risk arising out of volatility," NSE's managing director & CEO, Ravi Narain said.
 
NSE will be applying to the Securities and Exchange Board of India (SEBI) for permission to start derivatives on the index, after it has been tracked for a suitable period. Once the futures and options start on the index, investors whose portfolios are affected by volatility in the market can use the product to hedge their risks.

In the last few years, markets around the world have seen a higher volatility. India is no exception and it has also witnessed higher volatility.

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Exports grow by over 30% in June

Commerce secretary Rahul Khullar said it is too early to celebrate as exports have still not reached the level of the pre-global economic crisis period.

India's exports grew by a healthy 30.4% in June to $17.75 billion, reports PTI.

In June 2009, exports had shrunk by 27.7% to $12.81 billion under the impact of global slowdown, commerce secretary Rahul Khullar said in New Delhi today

Imports increased by 23% to $28.3 billion in June this year and the trade deficit for the month was $10.55 billion.

"It is good news but still not great news," Mr Khullar told reporters, adding that the exports have still not reached the level of the pre-global economic crisis period.

In June 2008, the country's exports were $19.2 billion.

In the first quarter ended June this fiscal, exports stood at $50.8 billion showing a growth of 32.2% over the year ago period.

Imports during the period grew by 34% to $83 billion leaving the country with the trade deficit of $32.2 billion.

The global economy slipped into major crisis from September-October 2008, impacting India's exports particularly to the developed markets.

While the exports have recovered following turnaround in the global economy, they are still below the level of 2007-08 and first half of the fiscal 2008-09.

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Fuel consumption rises 1.7% to 12.09 MT in June

The surge in demand for fuel has been attributed to the economy growing at over 8%

India's fuel consumption rose 1.7% to 12.09 million tonnes (MT) in June on back of high demand for auto fuel, reports PTI.

Petrol sales increased 12.7% to 1.24 MT in June against 1.1 MT a year ago, official data released in New Delhi said.

Consumption of diesel was up 6.9% to 5.19 MT as opposed to 4.86 MT in June 2009.

With the economy growing at over 8%, demand for fuel has soared.

Naphtha demand, however, fell 6% to 753,700 tonnes as gas from Reliance Industries' (RIL) eastern offshore KG-D6 fields replaced it as fuel in power plants.

Sales of imported liquefied natural gas (LNG) fell 15.5% to 612,400 tonnes as Petronet LNG Ltd did not import any cargo from spot market.

Jet fuel sales rose 10.5% to 402,200 tonnes and LPG demand rose 8.7% to 1.06 MT.

Kerosene consumption fell 8.6% to 714,600 tonnes.

During the first quarter of the current fiscal, petrol sales soared 11.9% to 3.61 MT from 3.22 MT. Diesel consumption was up 10.6% to 15.84 MT from 14.33 MT.

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