Investors recover risk appetite

The Euro Stoxx 50 volatility index, Europe's main gauge of equity market investor anxiety known as the VStoxx, dropped to a near eight-month low today, signalling a sharp recovery in investor risk appetite.

At 8.24am, the VStoxx, which measures the cost of protecting against a decline in shares on the Euro Stoxx 50 index, was down 4.1 per cent at 22.08, a level not seen since before the market's nosedive in early August.

The lower the volatility index, based on sell- and buy-options on Euro Stoxx 50 stocks, the higher investors' appetite for risky assets such as equities.

Reuters