India VIX, the volatility gauge, declined 15% in last two trading sessions, including over 8% on March 17, while the markets rallied during the two sessions.

With volatility on the wane, is the worst over for Indian markets that got battered due to the ongoing US-Iran war? While a falling VIX indicates chances of lower selling pressure, analysts said markets are still not out of the woods completely.

"The relief rally that started from the lows of 22,955 on Monday has extended on Tuesday and Nifty closed the day higher by 172 points amidst volatility. After opening on a positive note, Nifty continued to surge higher for better part of the session. The crucial resistance of Monday's opening upside gap has been filled completely around 23,550 levels and Nifty closed around it.

"A reasonable positive candle has been formed on the daily chart with minor upper and lower shadow. Technically, this market action indicates a formation of high wave type candle pattern after a rise and at the immediate hurdle. This could be a challenging factor bulls to sustain above 23600-23700 levels in the short term.