The FTSE 100 Volatility Index rose around 10 per cent on Thursday, though remained below 2015 highs, as investors seek protection in the options market due to an uncertain outcome in Britain’s election.
The FTSE 100 Volatility Index, which typically rises as investors seek to hedge their positions against market swings, rose 10.2 per cent to 18.15 points — still below a 2015 peak of around 24 points reached in January.
By comparison, the Euro STOXX 50 Volatility Index was up by 4.8 per cent.
Options market prices have suggested that Britain’s main share index may see its biggest swing in two years on Friday, when investors get their first chance to react to the result of one of the closest UK elections in decades.
Such a move would mark a break from market behaviour in recent weeks, which so far has seen concern over the election mainly restricted to specific sectors such as utilities or more domestically exposed stocks.