Is stock market rally in danger? Anil Singhvi warns as India VIX spikes

Market expert Anil Singhvi on Tuesday warned that rising India VIX levels and repeated failure of benchmark indices to sustain higher levels could slow down the ongoing rally in domestic equities.

India VIX, widely known as the market’s fear gauge, has risen sharply in recent months, indicating heightened volatility and investor caution. The volatility index was trading around 18.51 on Tuesday, up nearly 9.93 per cent during the day. However, over five days, the index remained lower by around 1.69 per cent, suggesting intermittent cooling after recent spikes.

Compared with the past month, India VIX is still down around 9.70 per cent, reflecting that market volatility had eased for a brief period before witnessing another sudden rebound.

In contrast, the longer-term trend shows a strong rise in volatility sentiment. Over the last six months, India VIX has surged nearly 52.87 per cent, while on a year-to-date basis, the index has jumped more than 101 per cent.

Nifty Support Level At 23,800 In Focus

Zee Business Managing Editor, Singhvi, said the Nifty has once again approached the crucial support level of 23,800, and investors should closely watch whether the index manages to close above this mark.

According to him, the Nifty had earlier touched intraday lows near the 23,800 zone on April 24 and April 30 before witnessing strong recoveries of nearly 2-3 per cent within a few sessions. He noted that on Monday, too, the index touched a low of around 23,799.

Singhvi said if the Nifty manages to close above 23,800 despite intraday weakness, the market could again witness a recovery towards the 24,200-24,400 range.

However, he cautioned that a closing below 23,800 would weaken recovery hopes and could drag the benchmark index towards the next important support zone between 23,300 and 23,550.

He said several technical indicators and an unfilled gap near 23,465 make the 23,300-23,550 zone an important support area for the market.

Bank Nifty Faces Fragile Situation

On the banking index, Singhvi said the situation remains fragile, and 54,200 has emerged as the most crucial support level for Bank Nifty.

He pointed out that Bank Nifty had made lows around 54,350 on April 13 and around 54,221 on May 5, after which the index witnessed sharp rallies of 4-5 per cent in a short span.

According to Singhvi, Bank Nifty again approached similar levels on Monday, indicating that the market is repeatedly taking support around the 54,200 zone.

He said if a recovery takes place from current levels, Bank Nifty could move towards the 56,400-57,400 range.

Global Triggers And Crude Oil Remain Key

At the same time, he avoided making aggressive downside projections, saying uncertainty in global events and market sentiment remains very high.

Singhvi said unexpected positive developments, including easing geopolitical tensions or a sharp fall in crude oil prices, could quickly improve sentiment in banking stocks.

He added that Bank Nifty generally reacts strongly when crude oil prices witness a significant decline.

India VIX Rebound Raises Concerns

Commenting on volatility, Singhvi highlighted the sharp rise in India VIX, often referred to as the market’s fear gauge. He said India VIX surged nearly 10 per cent for the second consecutive session and closed around 18.55, after touching a two-month low near 15.17 on May 7.

According to him, the recent rebound in India VIX from its 100-day moving average resembles a similar pattern seen earlier this year before a major market correction.

Singhvi recalled that during the previous rise in volatility, India VIX had surged nearly 160 per cent, while Nifty corrected around 11 per cent.

He clarified that the current situation may not lead to a similarly sharp fall because volatility levels are comparatively lower this time, but the rising VIX clearly indicates discomfort in the market.

Traders Advised To Remain Cautious

He said the market may struggle to sustain a strong upward rally as long as India VIX continues to rise.

Singhvi further noted that repeated failure of Nifty near the 24,200-24,400 resistance zone, combined with rising volatility, is creating pressure on market sentiment.

He said major market declines usually happen when multiple negative factors emerge together, and current market conditions suggest caution for short-term traders.

The analyst advised investors to closely monitor key support levels and volatility indicators over the next few sessions, especially ahead of weekly expiry, as market direction may depend on whether benchmark indices manage to hold their critical support zones.