Street signs: Rising VIX sets alarm, new aspirants for MF licence & more

Rising VIX sets alarm

A spike in India VIX index has prompted experts to sound caution on the market rally. The fear guage has risen 22 per cent this month and is currently at 24, a level approached only a few times in the past six months. “The surge in VIX is certainly not good for bulls. We expect some follow-up selling. Traders are advised lightening up their longs and prefer buying slightly out-of-the-money puts in case of any pullback around 14,500-14,550 in the Nifty,” said Sneha Seth, derivatives analyst, Angel Broking. The Nifty index closed at 14,433.7 on Friday after a 162-point fall.

China sanctions a boost for India

The US has upped the ante when it comes to imposing investment bans on Chinese companies. The move has prompted big global funds and index providers take steps to reduce exposure in Chinese stocks. Analysts believe this could be positive for large emerging market (EM) peers such as India. “Many global funds are divesting their holdings in several Chinese companies amid US sanctions. This is happening at a time when global liquidity is strong. We could see a portion of these funds getting diverted towards the Indian markets,” said an analyst.

Two new aspirants for MF licence 

Margin pressures and regulatory tightening does not seem to be deterring new aspirants wanting to join the mutual fund (MF) industry. Wizemarkets Analytics and Unifi Capital, both PMS players, have recently filed an application with the Securities and Exchange Board of India for an MF licence. They join the likes of Zerodha and Bajaj Finserv to have recently applied for a licence. Samco Securities and NJ India Invest are the two players that have already got an in principle nod and waiting for a final approval. Frontline Capital Services, a broker, had filed for a licence way back in 2017 and is awaiting in-principle nod. Currently, the industry has 44 players.