India VIX jumps 4%, while midcaps and smallcaps show resilience

On Tuesday morning, Indian stock markets opened with a sharp decline, snapping a two-day winning streak that had earlier lifted investor sentiment. The Sensex tumbled over 600 points, while the Nifty slipped below the 24,850 mark, weighed down heavily by IT and financial stocks.

At around 9:40 AM, the Sensex was down by 583.84 points (0.71%) at 81,592.61, and the Nifty was trading lower by 166.40 points (0.67%) at 24,834.75. The broader market, however, showed some relative strength, with the Nifty Midcap 100 falling just 0.17%, and the Nifty Smallcap 100 managing to gain 0.06%.

“IT and banking stocks dragged the market down today, reversing the momentum seen in the previous sessions,” observed analysts.

This sharp fall came right after frontline indices surged nearly 400 points in the previous session, driven by gains in auto, IT, and metal stocks. However, profit booking at higher levels appears to have triggered Tuesday’s slide, especially after the Sensex had gained almost 600 points intraday on Monday.

Technical Outlook: Cautious Optimism

Despite today’s fall, experts see underlying strength in the Nifty, especially if it manages to hold key support levels.

“Nifty formed a bullish candle on the daily chart, indicating strength,” said Hrishikesh Yedve, AVP – Technical & Derivatives Research at Asit C. Mehta Investment.

He pointed out that 25,000 remains a key psychological resistance, and a sustainable move above this level could push the index toward 25,200–25,250 in the near term. On the downside, the 21-Day Exponential Moving Average (24,530) is acting as a strong support. As long as Nifty stays above this level, a buy-on-dips strategy may be effective.

Bank Nifty Shows Signs of Support

Meanwhile, the Bank Nifty index is holding firm above key moving averages, showing that short-term support levels are still intact. According to Samco Securities:

“The 20-day simple moving average at 54,980 may act as immediate support in case of a pullback.”

They added that although the MACD remains in negative territory, the narrowing gap between lines suggests a possible trend reversal. A sustained close above 55,700 could open the doors for a retest of the all-time high near 56,100.

India VIX Rises, Market Mood Cautious

Adding to the volatility, the India VIX — a measure of market fear — jumped by 4%, reflecting rising nervousness among investors.

In terms of stock-specific action:

Top gainers on Nifty included Bharat Electronics, Dr. Reddy’s Labs, Cipla, IndusInd Bank, and Sun Pharma.
Top losers were Grasim, UltraTech Cement, NTPC, M&M, and Axis Bank.

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