VIX stays elevated despite five-day market rally as global risks keep investors on edge

The market has been on rally but investors fear a decline for several reasons. | Photo Credit: ANI India’s stock markets may have extended their winning streak to five consecutive sessions, but the persistence of the volatility index (VIX) around 15 points suggests that investors remain far from reassured. The so-called ‘fear gauge’, which measures the market’s expected volatility over the next 30 days, has eased from its late-October high of 17 but remains elevated amid mounting global uncertainties.While the Nifty 50 has declined nearly 8% since the beginning of 2026, the VIX has surged 65.4% year-to-date, reflecting heightened investor anxiety despite the recent recovery in equities.“VIX basically suggests potential for volatility in markets. The market has been on rally but investors fear a decline for several reasons. The crude crisis, flaring up of West Asia conflict, US results and Trump’s response, all add to anxieties for global investors,” V. K. Vijayakumar, chief investment strategist at Geojit Financial Services, said.On Wednesday, the Sensex gained 383 points, or 0.5%, to close at 77,301, while the Nifty 50 advanced 149 points, or 0.6%, to settle at 23,960, extending the market’s recovery for a fifth straight session.However, the gains were partly restrained by weakness in information technology stocks. The Nifty IT index declined 1.5% to 32,061 after falling as much as 3% during the session, weighing on broader market sentiment.“Post the U.S. midterm elections, investor focus will shift to the U.S. administration’s next course of action on West Asia, as any further escalation or diplomatic progress could significantly influence crude oil prices and global market sentiment in the near term,” Siddhartha Khemka, head of research, wealth management at Motilal Oswal Financial Services, said in a note.Strong corporate earnings for the September quarter have provided domestic equities with some support. Analysts also point to a possible shift in global capital flows towards India as concerns over stretched valuations in artificial intelligence-linked stocks trigger a reassessment of investment allocations.The AI-led rally over the past two years had attracted substantial foreign capital to markets such as South Korea, Taiwan and the U.S., diverting flows away from India.Crude oil remains another critical variable. Brent prices have retreated from the six-month high of $118 a barrel touched last Friday, trading at $104 on Wednesday, up 0.7%, as investors assessed US election developments and the evolving U.S.-Iran conflict.“Crude has to sustain the current levels or below $100 a barrel for markets to recover completely. A reversal in AI deceleration could also potentially risk reverse the gains we have seen so far,” Ajit Mishra, senior vice-president, research, Religare Broking, said. Published - November 04, 2026 08:23 pm IST