India VIX Falls 2.36% as Nifty Stabilises Amid Easing Global Risk Concerns

Mumbai, Sept 3: India VIX ended lower on Thursday as Indian equities stabilised after the previous session’s decline, while global markets recovered and fears of an immediate escalation in the US-Iran conflict eased. The historical series placed the closing India VIX at 11.2775, down 2.36%, after it moved between 10.75 and 11.47 during the session. 

India VIX Closes at 11.2775 as Volatility Eases 

India VIX opened at 10.8725 and touched an intraday high of 11.4700 and a low of 10.7500 before closing at 11.2775. The index had ended the previous session in the 11.55–11.59 range, depending on the market-data provider’s update and rounding convention. The historical series records the closing value at 11.2775, down 2.36%. 

The decline followed a calmer trading session for the Nifty 50, which avoided another sharp fall after losing 141.35 points, or 0.59%, on 2 September. The Nifty traded between approximately 23,920 and 24,025, limiting the scale of intraday movement. 

Nifty Opens Higher, Sending VIX Down 4.4% 

The strongest immediate influence came from the positive opening in Indian equities. The Sensex opened around 207 points higher, while the Nifty 50 started approximately 54 points higher, supported by stronger global cues and a positive GIFT Nifty indication. 

India VIX fell to about 11.10 by 9:59 am, representing a decline of roughly 4.4% from the previous close. The positive start reduced the immediate pressure that had followed Wednesday’s market weakness. The Nifty subsequently remained above approximately 23,900 and traded within a relatively contained range. 

Financial stocks also supported the market during the session. Axis Bank, Bharat Electronics, HDFC Bank and Adani Ports were among the stocks that remained firm, while realty, PSU banks, chemicals, private banks and financial services were among the stronger areas. 

US Stocks Rise, Easing Global Risk Pressure 

Wall Street’s recovery during the 2 September US session provided a positive global cue before Indian markets opened. The Dow Jones gained 295.07 points, or 0.56%, while the S&P 500 rose 0.46% and the Nasdaq Composite advanced 0.45%. 

Asian markets also largely traded higher during India’s session. South Korea’s Kospi gained 1.64%, Japan’s Topix rose 0.6%, and Australia’s S&P/ASX 200 advanced 0.1%, while the Nikkei remained broadly flat. 

GIFT Nifty was around 24,082, up approximately 117 points, or 0.45%, before the Indian market opened. These moves helped prevent the previous day’s weakness from immediately extending into another broad global risk-off session. 

Trump Remarks Moderate Immediate Iran Escalation Fears 

Geopolitical developments remained an important factor for volatility during the session. US President Donald Trump said on Wednesday that the renewed US campaign against Iran would not continue for “too long”, while US forces had targeted Iranian radar and missile systems. 

The comments reduced concerns about an immediate prolonged escalation, although the US-Iran conflict remained unresolved. The absence of a fresh major escalation during India’s trading hours contributed to a moderation in the risk premium that had surrounded the previous session. 

The effect was also visible through crude oil, another key link between Middle East tensions and Indian markets. 

Brent Holds Near $95–96, Limiting Fresh Oil Pressure 

Brent crude remained broadly stable around $95–96 a barrel on 3 September instead of recording another sharp increase. Brent was reported at approximately $95.30, down around 0.35% in early trade, while another market update placed crude broadly near $96. 

The stabilisation followed assessments that the renewed US-Iran operation might not continue indefinitely. Elevated oil prices remained relevant for India because they affect the import bill, inflation, the current-account balance, the rupee, corporate margins and interest rates. 

However, crude did not deliver another fresh upside shock during the session, allowing the India VIX to remain below its previous-session levels. 

Rupee Touches ₹94.30 Before Import Demand Returns 

The rupee initially strengthened against the US dollar, briefly reaching a two-month high of ₹94.30 before settling around ₹94.46. The move provided another stabilising signal after the currency had faced pressure from elevated crude prices and geopolitical uncertainty. 

The initial strengthening was supported by substantial inflows following special Reserve Bank of India measures. However, banks servicing large importers increased dollar purchases as higher crude prices raised expectations of a larger oil import bill. This limited the currency’s improvement and kept foreign-exchange risks relevant during the session. 

US Yields Near 4.818% Keep Global Risks Elevated 

US Treasury yields remained a background source of pressure. The US 10-year Treasury yield had reached around 4.818%, its highest level since November 2023, amid inflation concerns and worries over US government debt, before easing towards 4.78%. 

At the same time, markets were increasingly pricing a possibility of a September Federal Reserve rate hike, with the probability rising to roughly two-thirds. Elevated oil prices, inflation concerns and high Treasury yields contributed to the repricing. 

These global risks remained present even as yields eased from their intraday peak, preventing the volatility backdrop from becoming completely calm. 

India VIX Ends Above 10.75 Low as Risks Remain 

The intraday pattern showed that volatility expectations eased sharply at the start but did not remain at the day’s lowest level. India VIX fell to 10.75 before recovering to close at 11.2775, indicating that some volatility premium remained in the market. 

Institutional flows from the previous session also provided a carry-over backdrop. Foreign institutional investors were net buyers of ₹6,688 crore, while domestic institutional investors bought around ₹2,813 crore on 2 September. These were not 3 September transactions but formed part of the market conditions entering Thursday’s session. 

Overall, the India VIX decline reflected a combination of Indian equity stabilisation, stronger global markets, moderated immediate US-Iran escalation concerns and stable crude prices, while elevated US yields, Federal Reserve rate uncertainty, high oil prices and the unresolved conflict remained key risks. 

September VIX History Shows 9 Positive Years 

Seasonality data shows that India VIX has delivered positive September returns in 9 of 18 years. September’s maximum positive change stands at 34.92% in 2018, while the average positive change is 17.04%. The maximum negative change was -26.10% in 2009, with an average negative change of -9.93%. The average change for September stands at 3.55%. 

India VIX closed at 11.2775, down 2.36%, after moving between 10.75 and 11.47. The session combined a stronger Indian market opening, positive global equity cues, stabilised crude prices and moderated immediate geopolitical concerns, while elevated US yields, Federal Reserve uncertainty and the unresolved US-Iran conflict remained part of the broader market backdrop. 

Source 

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