(Bloomberg) -- A gauge of volatility in Indian stocks has eased by more than half as Prime Minister Narendra Modi’s return to power after a tight race in elections assuaged concerns over policy continuity.

The NSE’s India Volatility Index — a measure of 30-day ahead volatility based on options pricing — fell more than 4% on Friday, extending its plunge since June 4 peak to more than 50%. It surged to its highest level in more than two years last week, when the election outcome threw a surprise with the ruling Bharatiya Janata Party losing its majority in the lower house of parliament. 

--With assistance from Ashutosh Joshi.

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