Europe stock 'fear gauge' jumps to 2-1/2-month high

PARIS Wed Feb 6, 2013 2:14pm GMT

PARIS Feb 6 (Reuters) - The Euro STOXX 50 Volatility Index , or VSTOXX, Europe's widely-used measure of investor risk aversion, hit a 2-1/2 month high on Wednesday afternoon as European stocks resumed their sell-off.

The VSTOXX, based on put and call options on Euro STOXX 50 shares, is used to measure the cost of protecting stock portfolios against corrections as it usually moves in the opposite direction to cash equities.

It surged 12.5 percent to 21.62, its highest level since mid-November, as the return of worries about Spain and Italy prompted investors to hedge their equity portfolios in case of a further retreat in stocks.

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After wave of QE, onus shifts to leaders to boost economy

DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.