Street Signs: Low Vix, high tension, IPO fireworks light up grey market sky

A calm Vix belies market jitters as FPIs sell aggressively; IPO grey market stays hot; traders push back against Sebi's plans to curb weekly derivatives expiries

Low Vix, high tension: The mirage of stability 

On September 18, the India Volatility Index (India Vix) — often dubbed the ‘fear gauge’ and a key indicator of market choppiness — closed at 9.89, signalling low volatility expectations. Yet this calm reading sharply contrasted with the market’s recent turbulence. The Nifty fell for a sixth consecutive session, hitting 24,655. Traders say the Vix’s muted level reflects complacency, catching many off guard amid aggressive selling by foreign portfolio investors (FPIs). Last week, FPIs withdrew roughly ₹15,000 crore from Indian stocks, pushing the Nifty down 2.6 per cent — its steepest weekly drop since February 28. The intense selling briefly sent the Vix up 15 per cent to 11.35. Technical analysts caution that the Nifty remains in a downtrend, with key support levels at 24,500 and 24,350. 

IPO fireworks light up grey market sky 

With seven mainboard initial public offerings (IPOs) set to close next week, this month’s tally is on track to be the highest since January 1997, with 18 deals already completed. Despite the heavy activity, grey market premiums suggest sustained investor appetite, ranging from 10 to 20 per cent for upcoming IPOs. TruAlt Bioenergy and Fabtech Technologies are commanding particularly high premiums, indicating strong demand. This trend could benefit Tata Capital’s mega IPO, opening October 6, as well as LG Electronics India’s forthcoming offering. 

#SaveWeeklyExpiry: Battle for flexibility 

Traders are closely monitoring developments around the Securities and Exchange Board of India’s (Sebi’s) stated pivot towards longer-tenor derivatives contracts, aimed at curbing excessive speculation and mounting retail losses. While leading brokers maintain that discussions on ending weekly derivatives contracts have not begun, some traders have taken to social media to voice opposition. Last week, #SaveWeeklyExpiry trended online. Traders have also reached out to the finance ministry and Sebi, highlighting the benefits of weekly expiries and citing global market practices. They warn that tighter restrictions could push activity to unregulated or cryptocurrency platforms. To mitigate retail losses, some traders advocate mandatory derivatives trading certification through the National Institute of Securities Markets, which would establish a baseline of professional knowledge.