On Thursday, September 24, the India VIX surged to an intraday high of 13.22, up 28% from its previous level, before closing at 12.70, a rise of 22.76%. The volatility gauge, which measures the market’s expectation of near‑term price swings, reflected the sharp decline in the equity benchmark indices that day. Over the past year the NSE’s Volatility Index has jumped 21%, while in the last six months it has fallen 48.5%. The index had touched a low of 8.18 in 2023 today.

At market close, the S&P BSE SENSEX fell 1.67%, or 1,248 points, to 73,580, while the NSE NIFTY50 index dropped 1.64%, or 384 points, to 23,063. The decline was driven by a broad sell‑off across sectors, with all sectoral gauges trading in the red. The volatility index, expressed as annualised percentage terms, is derived from the options order book of the underlying index and indicates expected short‑term fluctuations. The sharp fall in the benchmark indices amplified investor anxiety, reflected in the VIX spike.

Insurance Regulatory and Development Authority of India (IRDAI) proposed a ban on ‘dark patterns’ on insurance websites, aiming to rationalise distribution costs and recalibrate commission structures. The proposals triggered a sharp sell‑off in insurance distribution platforms. Shares of PB Fintech fell 30.02% on the NSE, while Turtlemint Fintech Solutions dropped 20%. The expected impact on insurers varies with their existing cost structures and distribution mix, but the immediate effect was a significant decline in the stock prices of the affected platforms.

Banking and financial stocks faced heavy selling pressure, souring investor sentiment that was already dampened by weak global cues amid a surge in crude oil prices. The NIFTY Bank index fell 1.96%, or 1,110.40 points, with 13 of 14 constituents declining. The fall in the NIFTY Bank index was a key factor behind the sharp decline in the benchmark indices on the NSE. The IRDAI’s proposed tighter Expense of Management limits and lower commission caps added to the negative sentiment, while the rise in Brent crude to around $105.4 a barrel after a 2% gain the previous session further weighed on markets.

The NIFTY Midcap 100 and NIFTY Smallcap 100 each fell 2%, underperforming the main equity benchmark indices. All sectoral gauges traded with losses, and 47 stocks on the NIFTY50 index closed in red. Top laggards included Bajaj Finance, HDFC Life Insurance, Adani Enterprises, Bajaj Finserv and IndiGo. The VIX had jumped 21% over the past year and fallen 48.5% in the last six months, having touched a low of 8.18 in 2023. These movements underscore the heightened volatility and investor caution prevailing in the market.