India's VIX nears 52-week low: What it means for market
20 Dec 2025

India's Volatility Index (VIX), a key measure of market sentiment, came close to its 52-week low this week.

The index hit an intraday low of 9.44 on Friday before closing at 9.52.

The drop is surprising many observers as it comes despite lackluster performance from Nifty and Sensex-listed stocks.

The decline in VIX India suggests that investors are not overly concerned about the underwhelming returns from major Indian stocks on these indices.

Expert insights on VIX India's decline
Market analysis

Prashanth Tapse, Senior VP (Research) at Mehta Equities, explained that the sharp fall in India VIX reflects a market pricing in near-term stability and low uncertainty of any big event.

He added that this decline is driven by the absence of major domestic or global risk events.

Avinash Gorakshkar, a SEBI-registered fundamental equity analyst, attributed this fall to measures enabling Domestic Institutional Investors (DIIs) to counter Foreign Institutional Investors (FIIs), who have been net sellers since July 2025.

VIX India's fall and Bank of Japan's rate hike
Future predictions

Gorakshkar also spoke about the potential impact of the Bank of Japan's historic interest rate hike on VIX India.

He said that it could put pressure on the US dollar, possibly triggering buying from FIIs who have been net sellers in Indian stock market.

This could lead to a new 52-week low for VIX India.

VIX India's record low and market sentiment
Investor outlook

Ajit Mishra, SVP of Research at Religare Broking, linked the record low of VIX India with investor sentiment.

He said it indicates that the market is somewhat clueless and lacks any significant trigger.

Mishra also noted that traders are keeping positions light at present, with options premiums softening as they don't expect major or wild swings at this juncture.