`Fear Index` India VIX falls below 14, signals cooling market nervousness
Market fear and nervousness eased on Thursday as the India VIX -- often referred to as the 'fear index' -- dropped below the key level of 14.
This came even as investors remained cautious due to ongoing geopolitical tensions in the Middle East.
In the noon trade, the India VIX was down 2.5 per cent at 13.92. This marks a 20 per cent drop in the volatility index over the past one month -- indicating that traders are less worried about sudden market swings.
Experts said with the India VIX trading below the important 15 mark, it signals reduced volatility and reflects improving investor confidence.
This could support the current market uptrend, provided other global and domestic cues remain stable.
"The decline in the fear index suggests that investors are reacting calmly despite geopolitical concerns," they noted. It also points to strong institutional flows and better global signals contributing to the positive mood.
In the previous session, the India VIX had closed at 14.27, slightly down from 14.40, showing a steady but cautious investor sentiment.
With the latest move, markets seem to be shifting into a more stable phase, though risks still remain on the horizon.
Meanwhile, the benchmark indices were slightly down. The Sensex slipped by 37.40 points, or 0.05 per cent, to 81,407.26 during the intra-day session .
The Nifty also dipped 7.20 points, or 0.03 per cent, to 24,804.85 over the US Federal Reserve policy decision and weak Asian cues.
As expected, the US Federal Reserve decided to keep interest rates unchanged.
However, in its statement, the central bank maintained its forecast for two rate cuts this year, although a growing number of policymakers now believe there may be no cuts at all.
“The Fed also made a slight revision to its long-term outlook, now projecting only one quarter-point cut each in 2026 and 2027,” said Mandar Bhojane of Choice Broking.
