India VIX Rises 3.37% to 11.04 as Oil, US-Iran Tensions and MSCI Rebalance Lift Volatility

Mumbai, Aug 31: India VIX closed at 11.04, up 0.36 points or 3.37%, on Monday as renewed US-Iran military tensions, Brent crude above $90 a barrel, higher expectations of a US rate hike and the MSCI index rebalancing kept volatility elevated. The volatility index opened at 10.68, its previous close, and moved between 10.68 and 11.44 during the session. 

India VIX Closes at 11.04 After Reaching 11.44 Intraday 

India VIX ended the session at 11.04, compared with Friday’s close of 10.68. The index touched an intraday high of 11.44 and a low of 10.68. Its 52-week range stood at 8.72 to 28.90, keeping Monday’s close well below the year’s peak. 

The index rose sharply during the morning after opening unchanged, reaching around 11.38 and standing at approximately 11.34 at 10:28 am, up 6.18%. It later remained broadly elevated in the 11.20–11.25 region before easing towards the close. The available technical reading classified the trend as Neutral. 

The day’s Classic pivot levels were R1 at 11.04, R2 at 11.39, R3 at 11.65, PP at 10.78, S1 at 10.43, S2 at 10.17 and S3 at 9.82. Fibonacci levels were 11.02, 11.16, 11.39, 10.78, 10.55, 10.41 and 10.17, while Camarilla levels were 10.74, 10.79, 10.85, 10.78, 10.62, 10.57 and 10.51, respectively. These support and resistance levels were calculated from the previous trading day’s range. 

US-Iran Escalation and $90 Oil Push India VIX Higher 

Renewed military escalation between the United States and Iran was the principal global development during Monday’s session. US forces struck Iranian launchers, while Iran retaliated against US forces, marking the first known direct US strikes on Iran since late July. 

The developments increased concerns about possible disruption around the Strait of Hormuz, an important global oil-shipping route. Brent crude subsequently moved above $90 a barrel, with the price later reported at around $90.92, up 3.2%. The rise in crude added to concerns over India’s inflation, current account, currency and corporate cost pressures. 

The combination of geopolitical escalation and higher oil prices coincided with the rise in India VIX from 10.68 at the open to above 11.3 during the morning. 

Fed Rate-Hike Expectations Add to Global Market Pressure 

Expectations of higher US interest rates provided another source of pressure during the session. Comments by Federal Reserve Chair Kevin Warsh continued to influence market expectations, with the probability of a September US rate increase rising to 57%. 

Higher US rate expectations were accompanied by increases in global bond yields. Japanese two-year government bond yields reached a 31-year high, while Germany’s two-year yield reached their highest level since July 2024. 

The combination of geopolitical tensions, higher crude prices and expectations of tighter US monetary policy contributed to a weaker global market backdrop as Indian equities opened. 

Nifty Falls 0.68% as Broad Selling Keeps VIX Elevated 

Indian equities reflected the weaker global backdrop, with the Nifty 50 at 24,011.48, down 0.68%, and the Sensex at 76,824.45, down 0.58%, at around 10:13 am. All 16 major sectors were lower at that stage, while information technology stocks declined about 2% and the small- and mid-cap indices fell around 1%. 

The weakness subsequently extended across the broader market. The Nifty Midcap 100 declined around 0.68%, while the Nifty Smallcap 100 fell about 0.81%. Nifty Media and Nifty Metal each came under pressure, with both falling more than 2%, while information technology, realty and PSU Bank indices also remained weak. 

At one stage, 2,444 shares declined against 1,586 advances, indicating broad market weakness. The wider selling pressure kept India VIX above its opening level even as the benchmark indices attempted to recover during the afternoon. 

MSCI Rebalance Adds Closing Pressure Alongside New CAS 

The MSCI August 2026 index review became an important India-specific event towards the end of Monday’s session. The changes were scheduled to take effect from 1 September, requiring portfolio adjustments after the 31 August close. 

The review added four Indian stocks to the MSCI Global Standard index and removed three. The associated passive-fund portfolio adjustments were expected to concentrate institutional orders around the closing period. 

The activity also coincided with India’s newly introduced Closing Auction Session (CAS), making Monday an important test of the new closing mechanism. The combination of MSCI-related transactions and the closing process created an additional source of potential movement around the official market close. 

Reliance Industries Faces Pressure From MSCI Weight Reduction 

Reliance Industries was among the stocks affected by the MSCI-related changes, with its index weighting being reduced. The stock fell about 1% in early trading ahead of the rebalance. 

The movement was relevant to the benchmark because of Reliance Industries’ substantial weighting in Indian equity indices. Other large stocks also contributed to market pressure during the afternoon, with Adani Enterprises down around 5.1%, Adani Ports about 3%, Tata Steel approximately 2.3% and Infosys around 1.7%. HDFC Bank initially gained around 1.5%, while ICICI Bank helped cushion some of the market decline. 

Rupee Near ₹95.60 Before RBI Intervention Limits Pressure 

The rupee also remained under pressure as higher crude prices and expectations of higher US rates affected the currency market. The rupee opened around ₹95.49 per US dollar and weakened briefly to ₹95.60 before recovering to approximately ₹95.44 by 11:49 am. 

Reserve Bank of India intervention helped stabilise the currency. The currency movement therefore remained an additional macro factor during the session, while the intervention limited the extent of the rupee’s decline. 

Foreign institutional selling also remained a background factor. On 28 August, foreign institutional investors sold approximately ₹5,039.80 crore, while domestic institutional investors bought around ₹5,183.93 crore. These figures relate to Friday’s session and should not be treated as Monday’s final institutional-flow data. 

Afternoon Recovery Fades as VIX Holds Above 11 

The market attempted a recovery during the afternoon, temporarily easing pressure on volatility. At around 2:55 pm, the Sensex had recovered to a loss of roughly 194 points, while the Nifty reached approximately 24,090.85, compared with around 24,055.30 earlier. 

India VIX remained around the 11.1–11.2 region during this recovery rather than extending its morning increase. However, the recovery weakened again, with the Nifty at approximately 24,064.50 and the Sensex down around 301 points at 3:03 pm. 

India VIX’s seasonal data also shows that 12 of 18 years recorded positive returns during August. The month has seen a maximum positive change of 68.84% in 2015, an average positive change of 18.10%, a maximum negative change of -11.26% in 2016, an average negative change of -5.96%, and an average change of 10.08%. Its reported five-year return was 18.14%. 

India VIX closed at 11.04, up 3.37%, after rising to 11.44 intraday. Monday’s volatility was shaped by US-Iran tensions, Brent crude above $90, higher US rate-hike expectations, weak Indian equities, rupee pressure and the MSCI rebalance alongside the new Closing Auction Session. 

Source 

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