Country's benchmark gauge of option costs jumped the most in seven weeks as stocks declined amid concern Greece will leave the euro region. Demand for protection against swings in Infosys surged to a two-month high. The India VIX Index rallied 9.8 per cent to 17.30 at the close in Mumbai Monday, the steepest gain since May 12. The CNX Nifty index fell 0.8 percent to 8,318.40, its biggest drop in two weeks.
The Shanghai Composite Index sank 3.3 percent Monday, entering a bear market even as the government boosted stimulus.
"We expect volatility to remain elevated in the near term," Sanjiv Bhasin, executive vice president at India Infoline Ltd., said in a phone interview from New Delhi. "We don't expect the Nifty to fall below its support of 8,150. We advise clients to use this as an opportunity to buy, as the Greece problem will get solved."
Nifty 7,900 puts and 8,500 calls were the most popular by the number of outstanding contracts. Open interest in Nifty options increased rose to 3.66 million contracts from 3.33 million at Friday's close.
Infosys call options with a strike price of 1,000 rupees, and 900-rupee puts, had the highest open interest. Its shares dropped 1.5 percent to 990.15 rupees, a two-week low.
To contact the reporter on this story: Santanu Chakraborty in Mumbai at schakrabor11@bloomberg.net To contact the editors responsible for this story: Richard Frost at rfrost4@bloomberg.net Phani Varahabhotla, Dick Schumacher
