Euro STOXX 50 volatility index drops 14 pct

Last Updated: Wed, Jan 02, 2013 09:20 hrs

PARIS, Jan 2 (Reuters) - The Euro STOXX 50 Volatility Index , or VSTOXX, Europe's widely used measure of stock market risk aversion, dropped 14 percent on Wednesday after a budget deal by U.S. lawmakers buoyed investor sentiment.

The VSTOXX - which is used to measure the cost of protecting stock holdings against corrections - tumbled to 18.45, reversing most of a Dec. 28 surge that had been fuelled by fears a deal would not be struck.

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