India Vix eases 19% in five days, signals steady risk appetite; analysts see Nifty support at 26,000-26,100

Share Market Outlook: Nifty, Sensex Update

Indian markets’ volatility gauge extended its sharp decline on Friday, reflecting sustained risk appetite as benchmark indices hovered near record highs. The India Vix dropped to 11.1 in the morning session, down 5.8 percent for the day and easing from 11.79 at Thursday’s close. The index has now fallen 18.6 percent over five sessions, retreating from last Friday’s close of 13.63.

The steady slide in volatility comes as equities continue to find support from global risk-on cues and rising expectations of interest-rate cuts by major central banks. By mid-morning, BSE Sensex was up 191.5 points or 0.2 percent at 85,911.9, while NSE Nifty added 48.5 points to trade at 26,264.

Market structure positive, support reaffirmed

Technical analysts say the broader market structure remains positive, with repeated affirmations of strong support zones on the Nifty. Shrikant Chouhan of Kotak Securities noted that despite profit-taking at higher levels on Thursday, the short-term outlook stays positive.

Chouhan pegs crucial support for NSE Nifty at 26,100/85,500 and 26,050/85,300, adding that the bullish trend is intact as long as the index trades above 25,900. Resistance is seen at 26,350-26,450 on the Nifty and 86,000-86,500 on the Sensex. He recommends buying the Nifty on dips towards 26,125-26,075 with a stop loss at 25,900.

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ICICI Securities shares a similar view, saying the Nifty should maintain a positive bias while holding above 26,000. It expects 26,500 to act as an immediate hurdle, citing fresh open-interest additions in out-of-the-money call strikes, with the highest concentration at the 26,500 level. A strong put base at 26,000 is likely to cushion declines.

Earnings momentum, firm fund flows

The brokerage highlighted that the index’s breakout above its 14-month consolidation range marks a reinforcement of market strength. Its revised upside target now stands at 26,800 over the coming month, supported by earnings momentum and improving macro indicators. Immediate firm support lies at 25,600, which aligns with the 61.8 percent retracement of the previous rally and the 50-day EMA.

From a macro lens, Devarsh Vakil of HDFC Securities points to firm domestic flows, narrowing valuation premiums versus Asian peers, and expectations of strong Q2 GDP growth as underpinning sentiment. He sees resistance near 26,500 and support in the 26,000-26,050 zone.

Lower crude-oil prices and optimism around the India-US trade deal have further buoyed sentiment, with analysts saying the next phase of the rally may broaden out if small-caps begin to catch up.

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