India VIX cools 15% amid easing tensions, market breadth tilts in favour of bulls

India VIX marked its biggest single-day fall since April 15, when the index sank 19.8 percent.

Fear and volatility in the markets cooled off sharply on Monday, May 12, after India and Pakistan announced a ceasefire, leading to the India VIX sinking nearly 20 percent.

At close, the India VIX, which measures expected volatility in markets based on options trading, sank 14.97 percent to the 18.39 level in its biggest single-day fall since April 15, when the index sank 19.8 percent.

Furthermore, the market breadth was also firmly in favour of the bulls, as 3,230shares advanced, and only 461 shares declined, while 86 shares remained unchanged.

"The ceasefire between India and Pakistan has paved the way for a sharp rally in the market. The prime mover of the rally will be the FII buying which has been sustained for sixteen continuous days except last Friday when the conflict escalated," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments.

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Domestic macros like expectations of high GDP growth and revival of earnings growth in FY26 and declining inflation and interest rates augur well for the resumption of a rally in the market. Going ahead, FII buying in large-cap, blue-chip stocks like ICICI Bank, HDFC Bank, Bajaj Finance, RIL, L&T, Bharti, Ultratech, M&M and Eicher Motors are likely to lead the rally. Midcap IT and digital stocks are other segments to watch, he added.

At 11.30 am, the Sensex was up 2,336.85 points or 2.94 percent at 81,791.32, and the Nifty was up 724.25 points or 3.02 percent at 24,732.25. All sectoral indices traded in the green, while the broader markets outshone the benchmarks.

"The country's promising long-term outlook stems from robust business growth prospects driven by its youthful demographic and thriving digital technology sector, generating abundant high-quality investment opportunities across diverse industries," said Devarsh Vakil, Head of Prime Research at HDFC Securities.

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