As investors become used to living with COVID-19, market volatility indices are falling but are still above their pre-pandemic highs.

Last time Stockhead checked in on the ASX’s Volatility Index, a measure of Australian sharemarket volatility, back in June it was at 20.75. Since then it has fallen further to just over 18.

But this is still 50 per cent higher than in mid-February. It is also above levels reached for only a week in 2019, which was largely a stable year for global markets.

The ASX VIX index and its performance in 2019 (Graph: Bloomberg)


Trading volumes high too

Trading volumes have remained elevated both on the ASX and in other markets in the Asia Pacific.

Bloomberg reported the MSCI Asia Pacific Index, which tracks 14 market indices across the Asia-Pacific region, showed the weekly volume of shares traded had consistently been around 200 billion shares in recent weeks.

This peaked at over 300 billion shares traded in the week ended July 10.

The performance in recent weeks is significant because trading is normally subdued being Asia’s summer holiday months. The MSCI Asia Pacific Index’s average weekly volume in July and August last year came in at a much lower 49.1 billion.

A note from JP Morgan Hong Kong said trading volumes in Asia were “unusually high” for this time of year.

While it was difficult to put a finger on it considering it is not earnings season like it is currently in Australia, it noted the push was mainly led by retail investors and they were typically faster to take profits.


ASX volumes surpass 2019’s total

While Australia hasn’t seen the same July to August boom, trading volumes have already surpassed 2019’s total with four months remaining in 2020.

This year’s cumulative ASX 200 volume of 144.3 billion shares is well above the 98.5 billion reached at this time in 2019.

As for the volume of ASX Small Ords shares traded, it has slightly surpassed 2019’s total of 82.1 billion, rising to 86.1 billion. At this time last year, it was only 48.9 billion.

ASX Small Ords average weekly volumes in July have been around 30 per cent higher than July and August last year.