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Volatility index India VIX up 36% since September - What it indicates about market? Should you be worried? Explained

Livemint Markets

Published 13 Oct 2026, 12:44 am IST

India VIX- the gauge to measure market volatility, has been on a strong uptrend of late, rising over 36% since the start of September, and nearly 61% year-to-date, thanks to increased market volatility and uncertainties due to geopolitical factors.

The 9–12 range is considered the lower band, while 12-15 is the normal range for the India VIX.

While the fear index is still near the normal range, its sustained rise since September indicates it is time to brace for sharp intraday swings.

After touching a record low of 8.72 on 1 January 2026, the volatility index started its uptrend till March, rising to 28.91 after oil prices rose sharply due to the US-Iran conflict. Notably, the US and Israel launched coordinated air strikes on Iran on 28 February.

However, for the next five months- from April to August - the index saw a sustained decline on the monthly scale, coming back to levels near 9 amid various diplomatic efforts to resolve the West Asian conflict.

However, as the US-Iran continue fighting, and concerns over deteriorating macroeconomic outlook due to elevated oil prices mount, market volatility has been on the rise.

India VIX is derived from Nifty options prices and reflects the market’s expectation of volatility over the next 30 calendar days.

A rising VIX indicates the market is expecting high volatility. However, it should not be interpreted as a signal for an imminent market crash.

"It indicates how much movement the options market is pricing in - not whether the Nifty is expected to move up or down. A rising VIX points to higher expected volatility and uncertainty, but it is not, by itself, a directional forecast," Devarsh Vakil, the head of research at HDFC Securities, noted.

"India VIX has risen nearly 30% since September, but that percentage change needs context: VIX is already expressed as a percentage, so describing its move as a further percentage increase can overstate the signal. In absolute terms, India VIX has averaged around 14 over the past two years and is currently only slightly above 15. That puts it just above its recent average—not at a level that, by itself, signals acute market fear," said Vakil.

At the current juncture, it is not a matter of concern, according to experts.

"India VIX since September signals heightened uncertainty and a growing demand for protection against potential market swings. It does not necessarily indicate an imminent crash, but it does suggest that investors should brace for sharper intraday moves and a less predictable market," Ajit Mishra, SVP – Research, Religare Broking, noted.

According to Mishra, with geopolitical concerns, persistent foreign fund outflows and earnings-related uncertainty in focus, investors should avoid excessive leverage, maintain disciplined stop-losses and adopt a selective approach.

"The key message is caution, not panic—volatility can create opportunities, but capital preservation should take priority over aggressive bets," Mishra said.

Vakil underscored that the rise in volatility is worth monitoring, but the India VIX alone does not suggest that the market is headed for a sharp fall.

However, he quickly added that other reasons remain to be cautious.

"Geopolitical concerns could weigh on sentiment and trigger a fall, while the technical setup is also weak. Those factors may increase downside risk, but they should be assessed independently rather than inferred from the VIX’s percentage rise. The current VIX level alone does not confirm an imminent sharp sell-off," said Vakil.

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Originally reported by Livemint Markets.Source: livemint.com

Volatility index India VIX up 36% since September - What it indicates about market? Should you be worried? Explained

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