16 de octubre de 2014 / 10:09 / en 3 años

Europe's stock 'fear gauge' jumps to mid-2012 level

PARIS, Oct 16 (Reuters) - The Euro STOXX 50 Volatility Index surged to 35.5 on Thursday, its highest level since mid-2012, signalling a sharp rise in risk aversion on the back of worries over the strength of the global economy.

Europe’s widely-used measure of investor risk aversion known as the VSTOXX - which is based on put and call options on Euro STOXX 50 stocks - was trading at around 19 only a week ago.

The FTSEurofirst 300 index of top European shares was down 2.4 percent on Thursday, adding to a 3.2 percent slide on Wednesday. Southern European stocks were among the hardest hit, as investors dumped the most risky assets in the region.

The ratio measuring the number of negative ‘put’ options versus bullish ‘call’ options on the euro zone’s blue-chip Euro STOXX 50 index also surged to 2.3, marking its highest level since last August.

A ratio below 1 usually signals investors are bullish, while a ratio above 1.5 signals they are turning cautious, buying ‘puts’ as a hedge for their equity portfolios in case of a market sell-off. (Reporting by the Markets team; Editing by Sudip Kar-Gupta)

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