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The worsening fears over the Eurozone has shaken investor sentiment, fueling the CBOE Volatility Index, or VIX, and related volatility-linked ETFs.

The VIX Index surged 32% during intra-day trading on Wednesday. The Index was up 29.37% at last check.

Meanwhile, the VIX-related ETN, iPath S&P 500 VIX Short-Term Futures ETN (NYSEARCA:VXX), vaulted 18.64% on Wednesday.

U.S. stocks, led by the banking and materials sectors, were in a sell-off as investors weighed on the country’s exposure to European debt.

Italian bond yields rose to a record high of 7.502% since the euro currency was first introduced, breaking through the threshold that increases the risk of a potential default, reports Angela Moon fore Reuters.

“We just added another layer of uncertainty. The issue with Italy brings the region closer to a broader negative scenario and raises more concerns about a financial crisis,” Bob Pavlik, the chief market strategist at Banyan Partners, said in the Reuters report.

“Italian bonds are essentially serving as another fear index like the VIX, and right now they’re reflecting a lot of fear,” Charles Reinhard, deputy chief investment officer at Morgan Stanley Smith Barney, said.

iPath S&P 500 VIX Short-Term Futures ETN

click to enlarge

Max Chen contributed to this article.

Disclosure: None

Source: Eurozone Crisis Shakes Up Investors, Catapulting Key VIX ETN 18%