India VIX Falls 3.52% as Nifty Stabilises Amid Fed, Oil and Global Cues

Mumbai, Aug 28: India VIX fell 0.39 points, or 3.52%, to 10.68 during Friday’s session as the Nifty 50 stabilised after the previous day’s decline, while lower crude prices, stronger overnight US markets and a relatively steady rupee eased immediate pressure on domestic equities. India VIX opened at 11.06, touched an intraday high of 11.14 and fell to a low of 10.53. 

India VIX Falls 3.52% as Nifty Holds Above 24,100 

India VIX closed at 10.68, compared with the previous close of 11.07, marking a decline of 3.52%. The Nifty 50 ended at 24,108.35, up around 0.07%, after closing at 24,090.85 on Thursday. The Sensex also ended broadly flat-to-positive at around 77,084. 

The movement marked a reversal from Thursday, when the Nifty declined 0.48%, the Sensex fell 0.70% and India VIX rose by around 4.7%. On Friday, the stabilisation in benchmark indices coincided with a decline in the volatility index, while India VIX traded between 10.53 and 11.14. 

US Gains and Nvidia Boost Global Markets Before India Opened 

The global backdrop was stronger at the start of Friday’s Indian session. Overnight, the S&P 500 gained about 1.18%, the Nasdaq Composite rose around 1.82% and the Dow Jones advanced approximately 1.54%. Technology stocks and optimism following Nvidia’s results supported the US market. 

The stronger Wall Street performance reduced the immediate risk of another broad global equity decline after Thursday’s weakness. In India, the improved external backdrop coincided with a positive opening indication from GIFT Nifty, which was around 24,263.50, up roughly 65.5 points or 0.27% before the domestic market opened. 

Jackson Hole Uncertainty Keeps Fed Policy in Focus 

The Federal Reserve’s policy outlook remained a key source of uncertainty during Friday’s session as markets awaited Federal Reserve Chair Kevin Warsh’s first major Jackson Hole address. The speech was scheduled for later in the day, meaning the Indian market session reflected positioning ahead of the event rather than the impact of his eventual comments. 

Markets were focused on the US interest-rate path, inflation risks, future monetary easing, energy prices, Treasury yields and the dollar. These factors remained relevant to emerging-market currencies and equities, but the absence of the speech during Indian market hours meant it did not directly drive Friday’s India VIX close. 

Crude Oil Falls Towards $83 As Iran Risks Ease 

Crude oil prices moved lower on Friday, with oil heading towards a weekly decline despite continuing tensions involving Iran. WTI crude was around $83, while Brent remained in the high-$80s during the session. 

The decline followed attention on diplomatic efforts and the possibility of easing supply disruptions. Iran-related tensions and risks surrounding the Strait of Hormuz remained present, but lower oil prices reduced some of the immediate pressure associated with India’s import bill, inflation, current account and rupee. 

Rupee Opens at ₹95.51 as Oil Prices Decline 

The Indian rupee opened at approximately ₹95.51 per US dollar, compared with ₹95.54 on Thursday. The currency was supported by gains in Asian currencies, a softer global dollar tone, lower crude prices and a positive domestic equity opening. 

The rupee remained relatively stable during the session, avoiding an additional currency-related source of pressure for Indian equities. The combination of a steadier rupee and lower crude prices formed part of the broader backdrop accompanying Friday’s decline in India VIX. 

Nifty IT Rises Over 3% And Supports the Index 

Information technology stocks provided significant support during the session, with the Nifty IT index rising more than 3% at one stage. TCS, HCL Technologies and Tech Mahindra were among the prominent gainers. 

The strength followed the positive overnight performance of US technology stocks. The IT-led recovery helped offset weakness in other parts of the market and supported the broader Nifty as it remained above 24,100 during the session. 

Mixed Asian Markets Limit the Fall in Volatility 

Asian markets presented a mixed picture on Friday rather than a uniform positive move. Japan’s Nikkei gained around 0.3%, while South Korea’s KOSPI declined sharply as semiconductor stocks gave back some of their post-Nvidia gains. 

Japan benefited from relatively benign inflation data, while weakness in South Korea was linked partly to semiconductor stocks. The mixed regional performance kept global uncertainty present even as stronger US markets and lower oil prices provided support to Indian equities. 

India VIX Technical Levels Show 10.52 As Key Support 

The technical rating for India VIX remained NEUTRAL. The Classic pivot levels placed resistance at 11.45, 11.83 and 12.38, with the pivot point at 10.90. Support levels stood at 10.52, 9.97 and 9.59. 

The Fibonacci levels showed resistance at 11.26, 11.47 and 11.83, with support at 10.54, 10.33 and 9.97. Camarilla resistance stood at 11.16, 11.24 and 11.33, while support levels were 10.98, 10.90 and 10.81. 

India VIX Seasonality Shows 12 Positive August Years 

Seasonality data showed that India VIX has recorded positive returns in 12 of 18 years during August. The month’s maximum positive change was 68.84% in 2015, while the average positive change was 18.10%. 

The maximum negative change for August was -11.26% in 2016, with an average negative change of -6.55%. The overall average change for August stood at 9.88%. India VIX’s 52-week range remained between 8.72 and 28.90. 

Tempsens Debut Surges but Does Not Shift India VIX 

Primary-market activity was also visible on Friday, with Tempsens Instruments opening at a premium of more than 110% to its ₹300 issue price. The strong debut generated stock-specific activity but did not materially alter the broader India VIX movement. 

India VIX reflects expectations derived from Nifty options over the coming 30 days, making the movement of the benchmark index and broader market volatility more relevant to the index than activity in an individual stock. 

Friday’s Session Marked a 3.52% Volatility Reset 

Friday’s session combined a stronger overnight US market, lower crude prices, a relatively stable rupee, a positive GIFT Nifty indication, an initially stronger domestic market and stabilisation among major large-cap stocks. These developments coincided with India VIX declining from 11.07 to 10.68, after touching 10.53 intraday. 

At the same time, uncertainty surrounding the Jackson Hole speech, US interest rates, Iran-related tensions, oil prices and mixed Asian markets remained. The session therefore ended with lower India VIX levels despite the continuation of several global and domestic risks. 

India VIX ended at 10.68, down 3.52%, while the Nifty 50 closed at 24,108.35, up 0.07%. The session was marked by lower crude prices, stronger overnight US equities, a stable rupee and benchmark stabilisation, while Jackson Hole, US rates and geopolitical developments remained key market variables. 

Source 

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