The average volatility ratio has come down from 2.38 per cent between January 17 to June 2 to 1.61 per cent between June 5 and 2000-end, a decline of 32.35 per cent, according to the figures provided by the Securities and Exchange Board of India (Sebi).

"Volatility is a factor mostly affected by local conditions in respective countries and cannot be generalised. The Indian capital market's resilience to these kinds of volatility has been proved last year during which the benchmark BSE Sensex has moved in a wide range of about 2500 points during the year between the peak of over 6100 points and lows of close to 3500 points," Sebi chairman DR Mehta told The Financial Express on Monday.

Thus, there was no threat for the safety of the market. Various margins and trade guarantee funds available with the exchanges put together account for nearly 12,000 to 13,000 crore, Mr Mehta added.

The benchmark BSE Sensex has dwindled by 16.15 per cent and 12.34 per cent during the two periods respectively during the year. The index, which was at 5404 points on January 17 closed the year at 3972 points.

During the same periods, other emerging markets also posted a declining trend in the ratio of volatility, but Indian market has inched up to fifth position in terms of lower volatility among a basket of eight markets studied, which include Nasdaq, Japan, Hong Kong, South Korea, Indonesia, Philippines and Thailand.

In terms of returns, all the markets in the study have posted negative returns during both the periods except Hong Kong that too only during the first five months during which it has posted a marginal returns of 1.84 per cent. On this parameter, India has remained stuck to the fourth position during both the periods at a negative return of 16.15 per cent and 12.34 per cent respectively based on the benchmark index, while the returns were in the range of 1.84 per cent of Hong Kong and negative return of 35.47 per cent during the early period, and negative returns between 3.75 per cent of Philippines and 36.46 per cent of south Korea in the latter part of the year.

The range of volatility ratios of these markets has also come down from 1.29 per cent and 2.89 per cent to 1.07 per cent and 2.64 per cent. During the first five months period, Japan was leading the tally with 1.29 per cent of volatility, but in the following period it has slipped to third position when the ratio marginally inched up to 1.33 per cent in the later part of the year. Nasdaq had been witnessing high volatility during both the periods with 2.89 per cent and holding the last position during the early part of the year, only to move up the tally by a notch to hold seventh position with 2.60 per cent volatility in the latter part. South Korean market has witnessed the highest volatility during the latest period with 2.64 per cent of volatility ratio.