India VIX Ends at 11.35 as Crude Crosses $90 Amid US-Iran Tensions 

Mumbai, Aug 18: India VIX closed Tuesday’s session at 11.35, up 0.05 points or 0.44%, after moving between an intraday low of 10.14 and a high of 11.78. The volatility index opened at 11.32, compared with Monday’s previous close of 11.33, as renewed US-Iran uncertainty, higher crude prices, a weaker rupee and elevated global bond yields shaped market conditions. 

India VIX Holds 11.35 After Reaching 11.78 Intraday 

India VIX remained relatively close to Monday’s closing level through the opening stages before moving higher during the session. At around 10:00 IST, the index stood at 11.44, up 0.97%. Subsequent intraday readings placed it around 11.60–11.78, before it settled at 11.35 at 15:40 IST. 

The day’s range of 10.14–11.78 shows that volatility expectations fluctuated materially within the session, although the closing increase remained limited to 0.44%. India VIX is now well below its 52-week high of 28.90, while its 52-week low stands at 8.72. The index’s technical rating remained Neutral. 

US-Iran Ceasefire Expiry Pushes Crude Above $90 

The principal development affecting India VIX was the expiry of the temporary US-Iran ceasefire, which renewed uncertainty over the continuation of the conflict. The development coincided with a sharp rise in crude oil prices, with Brent crude moving above $90 a barrel and subsequently reaching around $91–92. 

The increase in oil prices added pressure to Indian equities because higher crude prices affect the country’s import bill, current-account dynamics, inflation expectations, the rupee and corporate margins. The combination of renewed geopolitical uncertainty and higher energy prices therefore coincided with greater volatility across Indian financial markets. 

Brent Nears $92 as Oil Risk Weighs on India 

Brent crude was reported around $91.14 a barrel after crossing the $90 mark and reaching its highest level since 30 July. It subsequently approached $92 as uncertainty surrounding the US-Iran situation persisted. 

The oil move was significant because it occurred alongside geopolitical concerns rather than as an isolated commodity-market development. Higher crude prices were accompanied by concerns around inflation, the trade deficit, the current account, corporate profitability, the rupee and interest rates, creating a broader macroeconomic risk backdrop for Indian markets. 

Rupee Slips to ₹95.68 as Crude and Dollar Demand Rise 

The Indian rupee weakened to approximately ₹95.6750 per US dollar, its weakest level in around three weeks. Early-session data also showed the rupee down about 7 paise at ₹95.68/$, as crude prices moved above $90. 

The currency movement coincided with the same global factors affecting equities: higher oil prices, geopolitical uncertainty and demand for the US dollar. The weaker rupee therefore formed another part of Tuesday’s market pressure, alongside the rise in crude and global yields. 

RBI Intervention Helps Contain Currency-Market Pressure 

The Reserve Bank of India (RBI) intervened across several segments of the currency market on Tuesday, including the spot market, exchange-traded futures and non-deliverable forwards. The intervention came as the rupee faced pressure from higher oil prices, strong dollar demand and rising US yields. 

The central bank’s activity provided a counterweight to the factors pushing the currency lower. The rupee nevertheless remained under pressure during the session, keeping crude prices and external-market conditions central to the day’s financial-market developments. 

US Yields Rise as Oil Fuels Inflation Concerns 

US Treasury yields also moved higher on Tuesday, adding another global factor to the market backdrop. Higher oil prices and renewed geopolitical uncertainty occurred alongside elevated bond yields, creating pressure across international financial markets. 

Higher US yields can influence emerging-market currencies, foreign portfolio flows and global financing conditions. On Tuesday, the combination of higher crude prices, rising bond yields and geopolitical uncertainty coincided with weaker equities and currencies across several Asian markets. 

Asian Markets Weaken as Energy Prices Increase 

Asian equities and currencies also weakened as markets assessed the effect of higher oil prices on economic conditions and corporate earnings. The regional decline provided a negative global cue for Indian equities before and during Tuesday’s domestic trading session. 

The weakness was linked to concerns that persistently higher energy prices could affect the broader economic outlook. Indian markets therefore faced pressure from both international developments and domestic transmission through crude, currency and equity prices. 

Indian Equities Open Lower as Crude Surges 

Indian benchmark indices opened lower as crude prices rose and uncertainty surrounding the US-Iran situation resurfaced. Around midday, the Sensex was down approximately 326 points, or 0.42%, while the Nifty 50 also traded lower. Another market update placed the Nifty around 24,230, down approximately 0.24%, and the Sensex around 77,452, lower by roughly 0.36%. 

The weaker benchmark performance provided a domestic channel for the global risk developments to influence India VIX, which is derived from Nifty option prices. 

IT Stocks Fall 1.8% as Market Pressure Broadens 

The Nifty IT index declined around 1.8% during the session, adding to weakness across the domestic market. The pressure was associated with a weaker US dollar, higher crude prices and geopolitical concerns. 

The movement in IT stocks added another source of pressure to the broader equity market, although it remained a secondary factor compared with the US-Iran developments and the sharp increase in crude prices. 

Bond Market Weakens as Crude Moves Above $90 

Indian government bonds also weakened in early trading as crude oil moved above $90 a barrel, while market participants assessed RBI liquidity and foreign-exchange operations. The development meant that equities, currencies and bonds were responding to the same broad macroeconomic developments during the session. 

The simultaneous movement across these markets formed part of Tuesday’s wider financial-market response to higher energy prices, geopolitical uncertainty and global yields. 

August Data Shows India VIX Gains in 12 of 18 Years 

Historical seasonality data shows that India VIX has recorded positive returns in 12 out of 18 years during August. The month’s maximum positive change is 68.84%, recorded in 2015, while the average positive change is 18.10%. The maximum negative change is -11.26%, recorded in 2016, with the average negative change at -5.46%. The average August change stands at 10.25%. 

India VIX Remains Near 11–12 Despite Global Risks 

Despite the number of negative developments during Tuesday’s session, India VIX did not record a panic-type increase. The index moved from Monday’s 11.33 close to an intraday high of 11.78 before ending at 11.35. 

Its closing level therefore remained within the broader 11–12 range. The session showed an increase in market volatility expectations without the sharp escalation associated with a major volatility event. 

Technical Levels Put 11.70 and 11.02 in Focus 

India VIX’s Classic pivot levels for the session placed 11.40 at the pivot point, with resistance levels at 11.70, 12.08 and 12.38. Support levels stood at 11.02, 10.72 and 10.34. 

The Fibonacci levels were 11.66, 11.82 and 12.08 on the upside, with supports at 11.14, 10.98 and 10.72. Camarilla levels were 11.39, 11.45 and 11.52, with supports at 11.27, 11.21 and 11.14. 

India VIX ended at 11.35, up 0.44%, after touching 11.78 intraday. Tuesday’s movement coincided with the US-Iran ceasefire expiry, Brent crude crossing $90, the rupee weakening towards ₹95.68, higher US yields and weaker equities, while RBI currency-market intervention provided a countervailing factor. 

Source 

• https://www.nseindia.com/reports-indices-historical-vix