India VIX falls under 14, signals easing market sentiment despite geopolitical uncertainties

Experts say the Nifty’s next move depends on geopolitical developments.

Fear and nervousness in the markets cooled off sharply, despite growing caution regarding the ongoing tensions in the Middle East, on Thursday, June 19.

At 11.35 a.m., the India VIX, which measures expected volatility in markets based on options trading, fell 2.5 percent to 13.92, under the 14 mark. The India VIX index has cooled off 20 percent in one month.

The Sensex was down 37.40 points or 0.05 percent at 81,407.26, and the Nifty was down 7.20 points or 0.03 percent at 24,804.85. About 1012 shares advanced, 2251 shares declined, and 117 shares unchanged.

With the index trading below the critical threshold of 15, this signals reduced volatility and suggests that market fear is waning. This typically acts as a positive indicator, reflecting growing investor confidence and increasing the likelihood of the uptrend continuing, noted experts.

The India VIX index falling also showcases reduced market volatility and improved investor sentiment. Overall, the outlook remains cautiously optimistic, supported by strong institutional flows and improving global cues.

In the previous session, the India VIX closed at 14.27, slightly down from 14.40, indicating a measured investor response amidst the uncertainty, without broad market capitulation.

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"The 24,500-25,000 range for the Nifty is likely to hold till news from the Israel-Iran conflict change for the better or for the worse. If news of deescalation of tensions break, Nifty will break out of the upper band of the range," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments.

"If the news is about escalation of tensions, particularly relating to troubles in the strait of Hormuz resulting in sharp spike in crude, it would be difficult for Nifty to hold on to the 24,500 support level. So watch out for the developments in West Asia."

According to Akshay Chinchalkar, Head of Research, Axis Securities, if the Nifty 50 records a daily close below the 24,750 lows against the 24,950 highs, it will increase the risk of a deeper pullback toward the low end of the 24,600 - 24,800 zone.

He added that the immediate resistance on the upside rests near yesterday's highs and should bulls break above there, the next upside objective will be 25240.

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