India VIX Rises 6.86% as Middle-East Tensions Push Crude Towards $100

Mumbai, Sept 9: India VIX closed at 11.99, up 0.77 points or 6.86%, on Wednesday as renewed Middle-East tensions pushed crude prices towards the $100-a-barrel mark, weakened the rupee and pressured Indian equities. The volatility index opened at 11.23, touched a low of 10.54 and climbed to a high of 12.03 during the session, reflecting rising market uncertainty without an extreme volatility spike. 

India VIX Climbs 6.86% as Risks Build 

India VIX started the session at 11.23, unchanged from its previous close of 11.23. It initially fell to around 10.54–10.55 before recovering and moving higher as pressure across global and domestic markets increased. The index reached an intraday high of 12.03 and eventually settled at 11.99. 

The move represented a rise of 0.77 points, or 6.86%, from the previous close. However, the index remained well below its 52-week high of 28.90 and above its 52-week low of 8.72. The day’s range stood between 10.54 and 12.03, showing that volatility increased from a relatively low starting level rather than entering an extreme phase. 

India VIX measures expected volatility in the Nifty options market over roughly the next 30 calendar days. Its movement during Wednesday’s session reflected the combination of geopolitical concerns, higher crude prices, currency pressure and weakness across Indian equities. 

Middle-East Escalation Pushes Oil Towards $100 

The fresh escalation in the Middle East emerged as the strongest global factor during the session. Iranian-backed Houthis launched attacks on several Saudi cities, while US forces struck Iranian oil tankers and Iran attacked a US base in Jordan. The developments raised concerns about a wider regional conflict and possible disruption to oil supplies. 

The geopolitical developments also pushed crude prices sharply higher. Brent crude moved towards $100 a barrel, with prices around $99.5 during the Indian trading session before moving above the $100 level later. The increase in oil prices became an important channel connecting the global developments with Indian markets. 

Higher crude prices raise concerns over India’s import costs, current account position, inflation and corporate costs. They can also affect expectations around monetary-policy easing and economic growth. With oil approaching the $100 mark, these concerns added to the uncertainty surrounding Indian equities and contributed to the rise in India VIX. 

Rupee Slips Past ₹95 as Crude Prices Rise 

Currency pressure added another layer to Wednesday’s market weakness. The rupee slipped past ₹95 per US dollar as higher crude prices intensified pressure on India’s currency. It was reported around ₹94.95/$, down 21 paise, during the session. 

The rupee’s weakness coincided with the rise in crude prices and renewed Middle-East tensions. Higher oil costs can increase India’s import burden, while a weaker rupee can add to the domestic cost of imported commodities. The combination of expensive crude and currency pressure therefore remained an important feature of the day’s market environment. 

The rupee was also reported as the worst-performing Asian currency during the session, highlighting the pressure visible across the currency market as investors assessed the effect of higher oil prices and geopolitical developments. 

Nifty Falls 0.67% as IT Stocks Slide 3% 

Indian equities also remained under pressure, adding to the volatility seen in the options market. By around 10:01 a.m., the Nifty 50 stood at 23,474.4, down 0.67%, while the Sensex was at 74,954.33, lower by 0.83%. As many as 12 of 16 major sectors traded lower during the session. 

The weakness extended across market segments, with mid-cap and small-cap indices also declining. The Nifty IT index emerged as a major area of pressure and fell around 3%. 

Selling in technology stocks added to the broader market weakness. Major IT companies, including HCLTech, Tech Mahindra, Infosys and TCS, recorded declines during the session. Coforge also fell around 6% after Chairman Om Prakash Bhatt resigned following concerns raised by an internal audit. 

The broader decline meant that Wednesday’s market pressure extended beyond crude-related concerns and affected several parts of the equity market. 

Global Markets Stay Cautious as Oil and Inflation Rise 

Global markets also provided a cautious backdrop for Indian equities. Asian markets remained subdued as crude prices approached $100 and Middle-East tensions intensified. Japan’s Nikkei and Hong Kong’s Hang Seng declined, while South Korea’s KOSPI gained on strength in semiconductor and artificial-intelligence stocks. 

European equities also traded lower, while US futures remained broadly flat. Markets continued to assess the effect of higher oil prices on inflation and economic conditions. The mixed performance across global markets kept attention focused on geopolitical developments and their effect on energy prices. 

The rise in oil prices also increased attention on upcoming US inflation data and the Federal Reserve’s policy outlook. Higher oil prices can add to inflation concerns, while uncertainty around US monetary policy remained another factor shaping global market conditions. 

India VIX Ends Near 12 After Intraday High 

India VIX’s closing movement showed a gradual increase in volatility during the session rather than a sharp panic-driven spike. The index moved from an opening level of 11.23 to an intraday low of 10.54, before recovering and reaching 12.03. It finally closed at 11.99, marking a 6.86% daily increase. 

The technical rating remained Neutral. The classic pivot levels placed resistance at 11.60, 11.96 and 12.54, with the pivot point at 11.02 and support levels at 10.66, 10.08 and 9.72. 

September’s historical data also shows mixed movement. India VIX has recorded positive returns in 9 of 18 years during September. The maximum positive change stands at 34.92%, recorded in 2018, while the maximum negative change is -26.10%, recorded in 2009. The average positive change is 17.61%, the average negative change is -9.93%, and the overall average change is 3.84%. 

IPO Activity Adds to Market Positioning Pressure 

Several public issues were also active in the Indian market during Wednesday’s session, including Asset Reconstruction, Steamhouse India, Karamtara Engineering, LCC Projects, Manipal Payment and Identity Solutions and Rentomojo. 

The ongoing IPO activity formed part of the day’s broader market environment and added a liquidity and positioning factor. However, the main developments accompanying the India VIX rise remained the Middle-East escalation, higher crude prices, rupee weakness and declines in Indian equities. 

Foreign portfolio flows also remained a carry-over factor. On 8 September, foreign investors sold about ₹123 crore of Indian equities, while domestic institutional investors bought around ₹1,350 crore. These figures relate to the previous session and therefore do not represent fresh September 9 flows. 

India VIX closed at 11.99, up 6.86%, after crude approached $100, the rupee weakened towards ₹95/$, and Indian equities declined. The index remained below its 52-week high of 28.90, while its 10.54–12.03 intraday range captured the rise in market volatility during the session. 

Source 

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