India VIX jumps over 10% as SENSEX, NIFTY50 decline; here are 5 key triggers behind market fall on Tuesday

The volatility gauge, India VIX, surged as much as 10.5% to an intraday high mark of the 13.59 level on Tuesday, September 15, as the equity benchmark indices remained under pressure.

At 2:50 PM, the index was at the 13.39 level, soaring 8.97%. Over a year’s time the NSE's Volatility Index, or VIX, has jumped 28%, while for six months’ time it has fallen 41%. It had touched a low of the 8.18 level in 2023.

Meanwhile, at the time of writing the piece, the NSE NIFTY50 index was down 0.95% to the 23,176.45 level, while the BSE SENSEX declined 577.18 points, or 0.77%, at 74,204.58.

The volatility index is a measure of the market’s expectation of volatility over the near term. Volatility is often described as the “rate and magnitude of changes in prices" and, in finance, often referred to as risk.

The index also indicates the expected short-term fluctuations in an underlying index. It is expressed as annualised volatility (in percentage terms, e.g., 20%) and is derived from the order book of the index’s options.

India VIX is a volatility index derived from NIFTY index option prices. It is calculated using the best bid-ask quotes of NIFTY options contracts to indicate the expected market volatility over the next 30 calendar days. The index follows the CBOE methodology, with modifications to suit the NIFTY options order book, including the use of cubic spline interpolation.

The fall in VIX, or fear gauge, indicates that the investors believe that the worst of the declines may not be over.

Here are the factors contributing to the market fall on Tuesday

The crude oil prices in the global market surged 3% intraday to $108.4 per barrel (bbl) during the trading session on Tuesday.

At 3 PM (IST), Brent crude oil prices were trading 2.39% higher at $108.21 per bbl on Tuesday’s trading session, compared to $105.68 per bbl at the previous market close, according to Investing.com data.

Last week, US President Donald Trump said that the oil prices that have surged because of the Iran war likely won't come down until after the US midterm elections.

The NIFTY Smallcap 100 index declined 2.36% to an intraday low of 19,434.55 levels, while the NIFTY Midcap 100 index slipped to a day’s low of 60,965.65 level, falling 2%.

Except for NIFT IT, all the other sectoral indices were trading in red at the final hour on Tuesday. NIFTY Realty, NIFTY Metal and NIFTY PSU Bank were among top losers.

The latest outflow comes after Foreign Portfolio Investors (FPIs) turned net buyers in July and August, infusing ₹20,200 crore and ₹29,630 crore, respectively, according to data from the Central Depository Services (India) Ltd (CDSL).

With this, the total outflow from Indian equities by FPIs has climbed to ₹2.37 lakh crore so far in 2026, surpassing the ₹1.66 lakh crore withdrawn during the entire 2025.

The level is closely watched by markets, with analysts saying it could affect the US economy and the stock market by reducing the relative appeal of US equities.

The yields have gained as traders price in the possibility that the Federal Reserve will need to keep interest rates higher ⁠for longer, after a jump in oil prices revived fears of renewed inflation pressure.

At the last hour of trading, as many as 38 stocks on the NIFTY50 index were trading lower.

Bharat Electronics was the top laggard on the index, falling 4.71%, followed by Shriram Finance (-4.5%), Adani Enterprises (-4.13%), InterGlobe Aviation (-3.75%) and Grasim Industries (-1.86%).