The India VIX, widely known as the market’s fear gauge, is on track for its biggest weekly drop in six months. The volatility index has fallen for five straight sessions, sliding more than 18% this week. After touching 13.64 on November 21, the VIX cooled sharply to about 11.1, marking its steepest weekly decline since May.
This decline in volatility coincides with a strong rally in equities, with both benchmark indices hitting fresh record highs on November 27, breaking out after nearly 14 months of consolidation.
Low Volatility Boosts Market Sentiment
A falling India VIX typically signals a supportive atmosphere for equities, especially when global central banks like the Federal Reserve and the RBI are turning more supportive in terms of interest rate stance. Lower volatility often indicates increasing confidence among investors and a more stable near-term outlook.
However, extremely low volatility can sometimes point to complacency, particularly when midcap and smallcap indices lag behind while large-caps dominate investor interest. This suggests a tilt toward safer and more liquid names rather than broad-based participation.
Sensex & Nifty Scale New Heights
On Thursday, the Sensex registered a sharp surge of 446 points (0.52%) to hit its all-time peak of 86,055.86, crossing the 86,000 milestone for the first time. The Nifty also touched a lifetime high of 26,310.45 before trimming intraday gains due to profit-taking.
Currently, both indices are trading slightly positive, with Sensex around 85,830 and Nifty around 26,235.
Market Outlook Turns Constructive
According to market experts, the broader environment is turning favourable after a long phase marked by subdued earnings and stretched valuations. Corporate earnings are expected to grow around 10% in FY26 and may accelerate to 15–16% from FY27 onwards. A potential India–US trade agreement, stronger DII inflows, and the possibility of FIIs shifting allocations toward India could further support market resilience.
This year has been among the least volatile periods for Indian equities, with strong retail participation absorbing selling pressure from FPIs and promoters, reflecting overall confidence in the market direction.