Mumbai: The growing inconsistency in India's stock markets has pushed the country to be the third most volatile market in the world. It is the markets of the neighboring China and Hong Kong who tops the volatility ranking, as per allotted by the market regulator Securities and Exchange Board of India (SEBI).

While the BSE benchmark index Sensex depicted 30.6 percent annualized volatility a three percent increase from the previous year's 27.6 percent volatility rate, NSE Nifty recorded a volatility of 32.1 percent in 2007-08, a four percent increase from the previous year's 28 percent. Both the indexes has witnessed a rapid fluctuations like BSE Sensex touched the yearly high of 21,206.77 on January 10, 2008, and the lowest level of 12,425.52 on April 2, 2007, in the financial year 2007-08. Moreover, the indexes also reflected the appreciation trend in the Indian market as they recorded an appreciation by 19.7 per cent and 23.9 per cent, respectively, on March 31, 2008, over March 31, 2007.

Assessing the volatility, SEBI pinpointed at its annual report that the Equity markets witnessed unprecedented buoyancy as well as steep corrections in 2007-08. Towards the end of the year, there was steep correction in the indices on account of concerns over domestic inflation and impending global recession. Infact, both the indexes has also shown a increase in the points gained. While Sensex gained 2,572 points to close at 15,644 on March 31, 2008, from 13,072 on March 31, 2007, Nifty also added 913 points to close at 4,735 at the end of March 2008 over 3,822 recorded at the end of March 2007. Infact, the country stands as the fourth highest in the world as per its annual return on a point to point basis after the HERMES index of Egypt (56.3 per cent) JCI of Indonesia (33.7 per cent) and IBOV of Brazil (33.1 per cent).