India VIX Falls 4.4% to 11.10 as Positive Global Cues Lift Indian Markets

Mumbai, Sept 3: India VIX declined 0.51 points, or 4.4%, to 11.10 by 9:59 AM on Thursday, after opening at 11.59. The index moved between 10.75 and 11.59 during the early session as Indian equities opened higher following a recovery in global markets, softer US Treasury yields and easing concerns over the immediate duration of renewed US-Iran military action. However, Brent crude near $95 and continuing geopolitical uncertainty remained key factors limiting the decline in volatility. 

India VIX Opens at 11.59 as Nifty Gains 0.35% 

The opening session began on a firmer footing for Indian equities, reducing immediate pressure on India VIX. The Sensex gained 154.60 points, or 0.20%, to 76,724.95, while the Nifty 50 rose 83.50 points, or 0.35%, to 23,997.95 at the open. The early gains followed positive global cues, advances across Asian markets and softer US Treasury yields. 

India VIX, which reflects expected volatility based on Nifty options, subsequently eased from its 11.59 opening level. By 9:59 AM, it stood at 11.10, down 4.4%, while the day’s low was 10.75. The move followed a previous-session rise that had left the index at 11.59 on 2 September. 

US Stocks Rise Up to 0.56% and Ease Volatility 

The overnight recovery on Wall Street provided an important supportive cue before the Indian market opened. The Dow Jones gained 0.56%, the S&P 500 rose 0.46%, and the Nasdaq advanced 0.45%, ending a three-session losing streak. Technology stocks were among the contributors to the recovery. 

The firmer US close provided a more stable overnight backdrop for Indian markets. With global equities recovering, the immediate pressure associated with aggressive downside hedging was lower at the Indian open. This coincided with a stronger Asian handover and a positive start for the Nifty, contributing to the early decline in India VIX. 

Asian Gains and GIFT Nifty Set a Positive Tone 

Asian markets also provided support to the opening setup, with South Korea’s Kospi rising about 1.64% in the early regional session. The broader improvement across Asian equities strengthened the overnight market cues reaching India. 

GIFT Nifty was also indicating a positive start, with morning readings around 24,083–24,092, implying a gain of approximately 87–92 points against the previous Nifty reference level. Another morning reading showed a gain of about 125 points, reflecting movements across different timestamps. The common signal was a positive opening for Indian equities, which was subsequently confirmed by the cash-market opening. 

US Treasury Yields Cool as Equities Find Support 

US Treasury yields also provided some relief to global risk assets after recent pressure. Yields were reported to have cooled or moved sideways, while the US dollar also softened, although the 10-year Treasury yield remained elevated. 

The moderation in yields formed part of the broader improvement in the overnight market environment. Softer bond yields reduced some of the immediate pressure from global financial conditions, supporting the stronger opening across Asian and Indian equities. This contributed to the lower volatility reading as India VIX moved below its opening level during early trade. 

Trump Says Iran Attacks Could Be Short-Lived 

Geopolitical developments remained central to the morning market narrative. US President Donald Trump indicated overnight that the renewed attacks on Iran could be short-lived, reducing some immediate concern over a prolonged escalation. 

The development came as renewed US-Iran military activity continued to influence oil and global markets. The situation remained unresolved, however, with uncertainty surrounding the duration of the conflict, energy supply risks and its potential inflationary effects. The moderation in immediate geopolitical concerns supported the early improvement in equity markets, while the continuing conflict kept a risk premium in crude prices. 

Brent Near $95 Keeps Pressure on India VIX 

Crude oil remained the most significant counterweight to the positive opening. Brent crude was around $95.30 per barrel, while US crude was around $90.82 in the morning market snapshot. 

The elevated oil price remained closely linked to the continuing US-Iran tensions. For India, the development was important because higher crude prices affect the import bill, the rupee, inflation concerns and corporate costs. As a result, the improvement in global equities was accompanied by continuing energy-related uncertainty, preventing the opening environment from becoming entirely benign for volatility. 

Financial Stocks Lead as Nifty Holds Near 24,000 

The positive Indian opening was supported by gains in major financial stocks. SBI, Axis Bank and ICICI Bank were among the early gainers, with SBI and Axis Bank each around 1% higher, while ICICI Bank was close to 1% higher. Adani Ports was also among the stocks contributing to the early market strength. 

The strength in financial stocks helped support the broader Nifty during the opening session. The Nifty’s ability to remain around the 24,000 level coincided with the decline in India VIX, as the index avoided an immediate downside shock after the market opened. 

Japan Raises India Rating To A- From BBB+ 

A separate India-specific development also added to the positive morning backdrop. The Japan Credit Rating Agency upgraded India’s sovereign rating to A- from BBB+, marking the first such upgrade in more than three decades. 

The agency cited India’s solid economic growth, effective economic policies, robust private consumption, public investment, improved financial-system soundness and reduced non-performing loans. It expects India’s economy to maintain growth of more than 6%. The upgrade was a positive sovereign-risk development, although it was not a direct intraday trigger for India VIX compared with movements in the Nifty, crude oil and global markets. 

Rupee at ₹94.97 Adds A Currency Risk 

The rupee remained vulnerable despite the stronger equity opening, with the currency around ₹94.97 per US dollar in the morning snapshot. The combination of elevated crude prices, geopolitical uncertainty and global market conditions continued to weigh on the currency backdrop. 

The exchange-rate movement remained relevant to the broader market because higher crude prices can increase India’s import bill and add to concerns over imported inflation and external balances. Consequently, currency weakness acted as a counterweight to the factors pushing India VIX lower during the opening session. 

India VIX Remains Within an 8.72–28.90 Range 

Despite Thursday’s early decline, India VIX remained well above its 52-week low of 8.72 and below its 52-week high of 28.90. Its technical rating remained NEUTRAL. 

For the day’s technical levels, the Classic pivot point stood at 11.41, with resistance at 12.29, 12.98 and 13.86, while support levels were 10.72, 9.84 and 9.15. Fibonacci levels placed resistance at 12.01, 12.38 and 12.98, with support at 10.81, 10.44 and 9.84. Camarilla resistance stood at 11.73, 11.88 and 12.02, with support at 11.45, 11.30 and 11.16. 

September Has Seen Negative VIX Returns In 10 Of 18 Years 

Historical seasonality also provides context for the September opening. India VIX has recorded negative returns in 10 of 18 years during September. The month has posted a maximum positive change of 34.92% in 2018, with an average positive change of 19.02%. 

On the downside, September’s maximum negative change was -26.10% in 2009, while the average negative change was -8.99%. Overall, the average change for September stands at 3.46%. 

Institutional Buying Adds to the Positive Market Backdrop 

The latest reported institutional activity also showed a supportive domestic market backdrop, with Foreign Institutional Investors/Foreign Portfolio Investors buying approximately ₹6,688 crore and domestic institutional investors purchasing around ₹2,813 crore. 

These figures represent the latest reported institutional activity and should not be treated as transactions occurring after the 9:15 AM opening unless separately timestamped. They nevertheless formed part of the market-positioning information available during the morning session. 

Auto Sales Support Stocks but Have Limited VIX Impact 

August vehicle sales also featured in the morning market narrative, with Bajaj Auto reporting total sales of 535,764 units, including a 10% year-on-year increase in domestic two-wheeler sales and a 53% rise in exports. The data provided support for specific stocks but remained a sector-specific development rather than a major driver of India VIX. 

India VIX Falls as Global Recovery Offsets Oil Risks 

The opening-session movement in India VIX reflected opposing developments. The recovery in US equities, gains across Asian markets, softer US Treasury yields, positive GIFT Nifty indications, a stronger Indian opening and gains in financial stocks all coincided with lower volatility. Trump’s indication that renewed Iran attacks could be short-lived also moderated some immediate geopolitical concerns. 

Against this, Brent near $95, continuing US-Iran military uncertainty and rupee weakness remained important sources of market risk. By 9:59 AM, the balance had favoured lower volatility, taking India VIX to 11.10 from its 11.59 opening level, although the elevated oil and geopolitical backdrop continued to keep volatility risks present. 

India VIX stood at 11.10, down 4.4%, by 9:59 AM after opening at 11.59. The early decline coincided with stronger Indian equities and improved global cues, while Brent near $95, US-Iran tensions and rupee weakness remained key opposing factors. September has recorded negative India VIX returns in 10 of 18 years. 

Source 

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