Euro STOXX 50 volatility index drops 14 pct

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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