India VIX Falls 7.9% to 12.16 After Fed Hike, Rupee Pressure and Geopolitical Risks

Mumbai, Sept 17: India VIX fell sharply during Thursday’s session, declining 1.04 points, or 7.9%, to close at 12.16, after moving between 12.13 and 13.16. The volatility index had closed at 13.17 previously. The session came against a mixed global backdrop, with a US Federal Reserve rate hike, pressure on the rupee, elevated geopolitical risks and softer crude prices shaping market conditions. 

India VIX Drops 7.9% As Volatility Eases 

India VIX opened at 13.16 and moved lower through the session, reaching a day low of 12.13 before ending at 12.16. The index remained well below its 52-week high of 28.90, although it stayed above its 52-week low of 8.72. 

September data also indicates that India VIX delivered positive returns in 9 of 18 years. For September, the maximum positive change stands at 34.92% in 2018, while the maximum negative change was 26.10% in 2009. The average positive change was 17.89%, the average negative change was -9.93%, and the average change stood at 3.98%. 

Fed Raises Rates 25 Basis Points, But VIX Falls 

The biggest global development entering Thursday’s session was the US Federal Reserve’s 25-basis-point rate increase, taking its benchmark rate to 3.75%-4.00%. The move marked its first rate increase since 2023 and came with expectations of another 25-basis-point increase during 2026. 

The rate decision initially strengthened the US dollar and lifted short-term US Treasury yields. Higher US rates can affect global financial conditions, emerging-market currencies and equity valuations. However, the global response during Thursday’s session was not uniformly risk-off. Asian equities edged higher, while US equity futures also recovered modestly. 

Rupee Breaches ₹96 Before RBI Support 

The Indian rupee emerged as another key domestic market trigger after weakening beyond ₹96 per US dollar during early trade. The currency touched approximately ₹96.09, its weakest level in more than a month, following the Fed decision and the stronger dollar. 

The rupee later recovered towards ₹95.90, with state-owned banks selling dollars, reportedly on behalf of the Reserve Bank of India (RBI). The central bank was also reported to have used dollar-rupee swaps. The currency movement remained an important feature of Thursday’s market session as the domestic unit first came under pressure and later recovered. 

Crude Falls as Saudi Supply Concerns Ease 

Crude oil prices declined during Thursday’s session after reports that Saudi Arabia was offering additional crude cargoes through Oman, easing concerns over supply disruptions. 

Oil remained a significant background risk because the ongoing Iran and West Asia conflict continued to affect supply expectations. However, the decline in crude prices during Thursday’s session reduced one source of pressure on India’s external and inflation outlook, while no fresh major escalation was identified as a dominant intraday volatility trigger. 

Nifty Gains 0.26% as Banks Lead Recovery 

Indian equities stabilised during the session after recent selling pressure. The Nifty 50 rose 0.26% to 23,279.45, while the BSE Sensex gained 0.16% to 74,452.88 in the reported market snapshot. Banks and financial stocks led the recovery, while 14 of 16 major sectors advanced. 

The broader market also showed gains, with mid-cap and small-cap indices each rising around 0.7%. The market recovery coincided with the fall in India VIX, while the IT index moved in the opposite direction and declined around 0.7%. The technology-sector weakness was linked to concerns over the effect of higher US rates on technology spending by American clients. 

NSE IPO Opens With ₹22,561.57 Crore Offer 

The opening of the National Stock Exchange (NSE) IPO added another major domestic market event to Thursday’s session. The issue was valued at ₹22,561.57 crore and was entirely an offer for sale, with existing shareholders offering their holdings rather than the company raising fresh capital. 

The IPO opened alongside secondary-market trading and added to the day’s primary-market activity. Early bidding was closely watched as the large issue coincided with a session shaped by the Fed decision, currency pressure and crude-price movements. The IPO itself did not produce a direct volatility shock in the India VIX data provided for the session. 

India VIX Holds Below 13.20 After Early Pressure 

The intraday movement in India VIX remained notable because the index did not sustain the upward pressure that followed the global rate decision and early currency weakness. The index moved from an opening level of 13.16 to a low of 12.13, before closing at 12.16. 

The pivot levels placed the central pivot at 13.20, with classic resistance levels at 13.55, 13.92 and 14.27, and support at 12.83, 12.48 and 12.11. Fibonacci levels were 13.48, 13.65 and 13.92 for resistance, with 12.93, 12.76 and 12.48 as support. Camarilla levels stood at 13.24, 13.30 and 13.37 on the upside and 13.10, 13.04 and 12.97 on the downside. The daily technical rating remained neutral, while moving-average data was not available. 

Global Risks Persist Despite 7.9% VIX Decline 

Thursday’s session retained several sources of uncertainty. The Fed’s rate increase and the prospect of another hike kept global monetary conditions tight. The stronger dollar added pressure on the rupee, while West Asia tensions continued to influence oil markets. US legislation concerning tariffs on countries relying on Russian energy also remained a source of uncertainty for India’s energy and trade environment. 

At the same time, softer crude prices, relative stability in Asian equities, recovery in Indian benchmarks and the rupee’s rebound provided a contrasting backdrop. These developments coincided with the decline in India VIX from 13.17 to 12.16 during the session. 

India VIX ended at 12.16, down 7.9%, after trading between 12.13 and 13.16. Thursday’s session combined a 25-basis-point Fed hike, rupee movement beyond ₹96, softer crude, and gains in Indian benchmarks, while West Asia and global monetary risks remained active through the final reported Indian market session. 

Source 

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