India VIX Holds Near 12.50 After Thursday’s 22.6% Jump as Oil and US Yields Keep Volatility Elevated

Mumbai, Sept 25: India VIX opened at 12.68 on Friday after surging 22.61% to 12.69 on Thursday, with volatility remaining elevated as crude oil stayed above $105 a barrel, US Treasury yields remained near multi-year highs and uncertainty around the US-Iran conflict continued. By 10:11 IST, India VIX stood at 12.50, down 0.20 points or 1.58%, after moving between 11.77 and 12.78. 

India VIX Holds Near 12.50 After Thursday’s Sharp 22.6% Rise 

Friday’s opening session showed a different volatility pattern from Thursday. India VIX opened at 10.35 on September 24, climbed to around 13.22 and closed at 12.69, marking a 22.61% single-day increase. The sharp rise came as the Nifty 50 fell 1.64% to 23,063.10, while the Sensex declined 1.67% to 73,580.54. 

On September 25, the volatility gauge did not extend that rise during the opening portion. At 10:11 IST, it was at 12.50, while its intraday range stood at 11.77–12.78. Its 52-week range remained 8.72–28.90, with year-to-date returns at 31.54%. The technical rating was Neutral, while the previous close was 12.69. 

US Bond Yields Near 5.50% Keep Global Volatility Elevated 

The global bond sell-off remained one of the principal external factors shaping Friday’s market backdrop. The US 10-year Treasury yield reached 5.225% late Thursday, its highest level since 2007, while the 30-year yield rose to 5.502%, its highest level since 2004. 

The rise in longer-term yields came alongside expectations of further US monetary tightening. Markets were pricing an approximately 68% probability of a Federal Reserve rate hike in October, according to the CME FedWatch tool. Higher yields and expectations of additional rate increases continued to influence the dollar, global borrowing costs and emerging-market financial conditions. 

For India’s opening session, this meant the volatility backdrop remained firm even though India VIX itself was slightly lower than Thursday’s close. 

Brent at $105.85 Keeps Oil Risk High Despite Friday’s Fall 

Crude oil provided a mixed signal on Friday. Brent crude was around $105.85 a barrel, down 0.69%, while West Texas Intermediate (WTI) was around $93.80, down 0.86% in early trade. 

The modest decline followed a sharp rise on Thursday, when Brent gained 3.4% and WTI advanced 2.7%. Markets were balancing expectations of a possible US-Iran truce against renewed attacks and risks to Middle Eastern energy infrastructure. 

US and Iranian negotiators were discussing a possible phased route involving the reopening of the Strait of Hormuz and the lifting of the US economic blockade on Iran. At the same time, security risks remained after renewed attacks in the region. 

US-Iran Talks Create Two-Way Volatility for Indian Markets 

The Middle East remained a central source of uncertainty for the opening session. The possibility of diplomatic progress offered some relief to oil markets, while continuing attacks kept supply concerns active. 

The two developments produced opposing effects on market conditions. Progress towards a US-Iran arrangement and reopening of the Strait of Hormuz could reduce the oil risk premium, while further disruption to energy infrastructure could keep crude prices elevated. Friday’s modest decline in Brent therefore reduced the immediate pressure without removing the broader oil-related risk. 

This two-way backdrop helped keep India VIX elevated after Thursday’s sharp repricing, even as the index remained below its early-session high of 12.78. 

Nifty Stabilisation Limits a Second VIX Spike 

Indian equities entered Friday after their sharpest decline in several months. The Nifty 50 had fallen 383.70 points, or 1.64%, on Thursday, while the Sensex lost 1,247.71 points, or 1.67%. All major sectoral indices ended lower, while the India VIX rose more than 22%. 

Friday’s opening indications were comparatively subdued. GIFT Nifty signals moved around the flat zone, while Asian markets produced mixed cues. The Nikkei 225 was up 0.48%, the Topix gained 0.58%, and Australia’s S&P/ASX 200 declined 0.50%. China and South Korea were closed for holidays. 

US equities also offered limited additional pressure overnight. The S&P 500 fell 0.02%, the Nasdaq Composite gained 0.01%, and the Dow Jones Industrial Average declined 0.31%. 

FPI Selling Of ₹5,027 Crore Adds to India’s Volatility Backdrop 

Foreign portfolio investors sold ₹5,027.36 crore of Indian equities on September 24, while domestic institutional investors bought ₹4,301.18 crore. The foreign outflow formed part of the risk backdrop entering Friday’s session after the previous day’s market decline. 

The flow data coincided with pressure from crude oil, elevated US Treasury yields and geopolitical uncertainty. However, Friday’s India VIX movement remained relatively contained during the opening session, indicating that the volatility index was holding around Thursday’s higher level rather than extending its previous day’s sharp increase. 

Rupee Opens at ₹95.90 As Dollar and Yields Stay Firm 

The Indian rupee opened at ₹95.90 per US dollar on Friday, compared with Thursday’s close of ₹95.96, marking a six-paise improvement at the open. At the same time, the dollar remained supported by higher Treasury yields and expectations of further Federal Reserve rate increases. 

The currency backdrop therefore remained closely linked to the global bond market and crude oil. With Brent near $106, the rupee continued to operate around the ₹96-per-dollar level, while elevated US yields added another external pressure point. 

Insurance Rules Add Domestic Pressure to Financial Stocks 

Domestic sector-specific concerns also contributed to Thursday’s volatility and remained part of Friday’s market backdrop. Proposed changes by the Insurance Regulatory and Development Authority of India (IRDAI) included tighter expense-of-management limits and lower commission caps for insurance distribution. 

The proposals contributed to sharp weakness across banking, financial services and insurance stocks on Thursday, when the Nifty Bank index fell heavily and financial shares added to the broader market decline. 

Because financial companies have significant representation in benchmark indices, the sector-specific pressure formed another domestic component of the volatility environment alongside global crude and bond-market developments. 

India VIX’s 12.08 Pivot Shows the Key Levels for Friday 

The previous trading range placed the classic pivot for India VIX at 12.08, with resistance levels at 13.82, 14.95 and 16.69, while support levels stood at 10.95, 9.21 and 8.08. Fibonacci levels placed resistance at 13.18, 13.85 and 14.95, with support at 10.98, 10.31 and 9.21. 

The Camarilla framework showed resistance at 12.95, 13.22 and 13.48, while support stood at 12.43, 12.16 and 11.90. These levels were calculated from the previous trading day’s range. 

September VIX History Shows a 4.14% Average Change 

Historical seasonality also provides context for September’s volatility pattern. Over 18 years, India VIX has recorded positive returns in September in 9 years. September’s maximum positive change was 34.92% in 2018, while the average positive change was 18.21%. The maximum negative change was -26.10% in 2009, with an average negative change of -9.93%. The overall average September change was 4.14%. 

India VIX remained elevated around 12.50 on September 25 after Thursday’s 22.61% jump. Friday’s opening backdrop was shaped by $105.85 Brent, elevated US Treasury yields, US-Iran uncertainty, FPI selling of ₹5,027.36 crore, mixed Asian markets and a rupee opening at ₹95.90. 

Source 

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