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Indian markets hold steady as New Delhi student protests continue
India VIX is below its June 6 level and the rupee has slipped 0.3% this week, with bond yields staying capped under 7% amid foreign inflows.
Student protests in New Delhi have challenged Prime Minister Narendra Modi politically but have not yet unsettled India’s financial markets, with equities holding steady and key indicators showing little stress, according to LiveMint Markets citing Bloomberg News.
The India VIX, a measure of implied stock volatility, is below the level on June 6 when the demonstrations started and has been trading in a narrow range. The rupee has slipped 0.3% this week to near a record low, but the move was largely linked to the oil-price outlook rather than protest concerns.
Bond-market indicators have also been comparatively calm, with the 10-year bond yield capped below 7% amid foreign inflows. Traders and economists said markets are more focused on whether the protests could weaken the government’s political standing or delay legislation than on near-term protest impact.
Potential risk, however, could rise if authorities launch a harsh crackdown or if the protests spread more widely, increasing worries about political and economic stability. LiveMint Markets also noted that the unrest was triggered by a leak of the national medical entrance exam paper that prompted a retest and allegations of student deaths by suicide, and tensions escalated after activist Sonam Wangchuk was taken to hospital against his will following a hunger strike.
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