STOCKS | Indian Stock Market Volatility Surpasses Asian Peers Amid Energy Concerns

Indian stock market volatility remains higher than other Asian regions, reflecting heightened investor concerns over India's energy dependency, high valuations, and corporate governance issues. According to Jin10, India's volatility index is still near its March 9 peak, the highest since June 2024. In contrast, volatility indicators for Japan and South Korea, both heavily reliant on fuel transported through the Strait of Hormuz, have declined from highs triggered by the Iran conflict. The Chicago Board Options Exchange Volatility Index has also decreased. This disparity suggests that India's risk premium is becoming increasingly stubborn amid the economic impact of the energy crisis. Even before the conflict, India faced challenges such as high valuations, AI technology disruption risks due to the lack of prominent chip manufacturers, and currency depreciation. The recent sell-off has pushed the country's stock index close to levels seen a year ago when U.S. tariff hikes caused market turmoil, while governance concerns have emerged at the nation's largest private bank.