Stock market today: Following strong buying in global markets amid rising optimism about the easing of the US-Iran war, the Indian stock market today witnessed strong buying on Thursday. After the heavy beating on three straight sessions, the Nifty 50 today opened with a big upside gap at 24,615 and touched an intraday high of 24,854. The key benchmark index is currently around 24,750. The India VIX today improved and slipped by over 16% to 17.7025.
According to stock market experts, this rally in Indian and global markets has occurred even as crude oil prices are skyrocketing. They said that, apart from small-cap buzz about the easing of tensions in the US-Iran war, technical and derivative factors also played a vital role in this relief rally. Now, at this juncture, when the 50-stock index is close to its resistance placed at 24,850 to 24,900, one might want to know where the Nifty 50 index can go if it breaks above this resistance decisively, or how much downside the 50-stock index may slip if it fails to break above this resistance?
India VIX today: What volatility index signals?
Advising investors to take a cue from the India VIX Index, Anuj Gupta, a SEBI-registered market expert, said the India VIX Index can give us an idea about the daily, weekly and monthly range, in which the Nifty 50 can move. It also provides an idea of the upside and downside levels where the Nifty 50 index may trade.
“To know the weekly range of the Nifty 50 index, using India VIX Index, one needs to use this formula [Nifty 50 current level x {(India VIX current level/ Square root of 52}/100]. Using this formula, the investor would be able to know the possible weekly deviation in the Nifty 50 index on both sides,” said Anuj Gupta.
Taking a cue from the above-mentioned formula, the Nifty 50 index is around 24,750, and the India VIX today is 17.9400. So, the possible weekly deviation in the Nifty 50 would be 615 points, which means the Nifty 50 may slip 615 points to 24,135 in a week if it fails to break the hurdle placed at 24,850 to 24,900. Likewise, it may scale up to 25,365 if it breaks above the resistance mentioned above.
“So, the India VIX today signals the weekly Nifty 50 range would be 24,135 to 24,365,” Anuj Gupta said. However, he maintained that the India VIX index just gives you an idea about the possible range. The rest of the movement is determined by the fundamentals.
What is moving the Nifty 50 today?
Why the Indian stock market bounced back despite soaring crude oil prices across the globe, Hitesh Tailor, Technical Research Analyst at Choice Broking, said, “Despite the surge in crude oil prices and persistent geopolitical tensions in West Asia, today’s market rebound appears largely driven by technical and derivative factors. After the recent sharp correction, benchmark indices had slipped into deeply oversold territory, prompting a relief rally. The cooling in volatility, with India VIX easing from elevated levels, suggests that a significant portion of the geopolitical risk premium had already been priced in during the earlier decline.”
The Choice Broking expert said that, from a derivatives standpoint, the bounce is largely supported by short covering and improving options positioning. The Nifty Put–Call Ratio had slipped to lower levels, reflecting excessive pessimism, which typically triggers a tactical pullback. As the index held above crucial support zones around the 24,100–24,300 range, fresh put writing and unwinding of bearish positions emerged, indicating traders’ confidence that the immediate downside may remain limited.
US-Iran war in focus
Pointing towards the optimism about the de-escalation in the US-Iran war, Hariprasad K, SEBI-registered Research Analyst and Founder, Livelong Wealth, said, “The optimism follows a notable reversal in global market sentiment, where major indices have rebounded from their recent bearish phase amid growing hopes of de-escalation in the ongoing Middle East tensions.”
“The Nifty 50 index may break above the 24,900 hurdle on a closing basis if the de-escalation buzz around the US-Iran war intensifies. However, if the de-escalation buzz about the US-Iran war fades out, then we may see sharp selling, and the key benchmark index may try to test the lower range that India VIX signals today,” Anuj Gupta concluded.
Latest developments in US-Iran war
The US-Iran war that kicked off over the weekend continued for the sixth day. The death toll in Iran from the ongoing war with the United States and Israel has reached at least 1,230 people, an Iranian government agency said Thursday, according to agencies.
Meanwhile, attacks on oil tankers continued. On Thursday, Iran’s IRIB News reported that an oil tanker was struck by the Islamic Revolutionary Guard Corps. Around the same time, an oil tanker suffered an explosion off the coast of Iraq, a Reuters report said.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
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