Friday the 13th jitters: Nifty below 25,500 and India VIX rises 15%; how should you navigate this volatility?

Friday the 13th jitters: Nifty below 25,500 and India VIX rises 15%; how should you navigate this volatility?

• Nifty fell below 25,500 as markets saw broad-based selling
• India VIX jumped 15 percent, signaling rising market fear
• Key support for Nifty seen at 25,000, resistance at 25,750

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The bloodbath on Indian benchmark indices on February 13 led to India VIX rising a whopping 15% and Nifty trading below the key 25,500 level.

Indian equity benchmarks tumbled on February 13, with broad-based selling pulling the Nifty below the 25,500 mark. The market remained volatile throughout the session, weighed down by weak global cues ahead of crucial US inflation data. The earlier boost from the US–India trade deal faded, while fresh AI-related concerns further dented sentiment, amid fears that Indian IT firms could face stronger competition from US-listed peers. By the close, the Sensex slumped 1,048.16 points (1.25%) to 82,626.76, and the Nifty declined 336.10 points (1.3%) to 25,471.10.

All major sectoral indices ended in negative territory. Energy, metal, and realty stocks led the losses with declines of 2–3%, while IT, consumer durables, FMCG, telecom, infra, auto, power, PSU, and oil & gas indices fell around 1% each. The broader market also came under pressure, as the Nifty Midcap and Small-cap indices dropped nearly 2% each.

Now, the key question on traders' minds is what lies ahead. Rupak De, Senior Technical Analyst at LKP Securities said the near-term bias looks weak.

"The Nifty opened gap-down, reflecting early weakness in IT stocks following negative cues from the US markets. At the end, the Nifty ended the session significantly lower. India VIX also moved back above its 200DMA, indicating rising fear among the market participants.

"From a technical standpoint, the setup has turned relatively cautious, with the index slipping below its 20DMA for the first time in the past few sessions. Additionally, it has breached the 38.2% Fibonacci retracement of the prior upmove from 24,571 to 26,341.

"With the index closing below the key support level of 25,500, the near-term bias appears weak, and there is potential for a decline toward the 25,000 mark in the short term. On the upside, immediate resistance is seen around 25,800," said De.

Another analyst said a break below the 25,400-mark could open the gates for further bloodbath for Nifty traders.

"Markets traded with a negative bias on Friday and remained under pressure for most of the session, with the Nifty slipping sharply as selling in heavyweight technology stocks intensified. After a weak start, the benchmark index moved in a narrow range during the first half, but the decline deepened as the session progressed. It eventually settled near the day’s low to close at 25,471.10. Selling was broad-based, with IT stocks among the top losers, while weakness was also visible in the metal, realty, and FMCG segments.

"Investor sentiment weakened as global technology stocks stayed under pressure, reinforcing risk-off behaviour in domestic markets. In addition, the absence of any fresh positive domestic triggers kept the overall mood subdued.

"The sharp fall in the IT pack has significantly altered the market tone, and a break below the 25,400 mark could open the door for a move toward the 25,100 gap area. On the upside, the 25,700–26,000 zone is likely to act as a strong resistance band in case of any recovery. Apart from IT, FMCG and realty also appear vulnerable to further declines, while banking, auto, energy, and select metal stocks may continue to show relatively better strength. Participants should align their positions accordingly and keep position sizes under control in light of the renewed weakness," said Ajit Mishra – SVP, Research, Religare Broking Ltd.

Bajaj Broking said Nifty has to move above 25,750 for strength to return to the market.

"Index on the weekly chart formed a bearish candle which remained contained inside previous week price range signaling consolidation amid stock specific action. Going ahead, immediate bias remains down below Friday’s gap down area of 25750. A follow through weakness will open further downside towards 25,200 and 25,000 levels in the coming weeks. Key support is placed at 25,000 being the confluence of the 52 weeks EMA and the 80% retracement of the recent up move. On the higher side only a move above 25,750 will signal a pause in current decline. While key resistance is placed at last week high of 26,000," said Bajaj Broking.