Indian benchmark indices Sensex and Nifty are poised for a gap-down open, potentially erasing gains from last week's ceasefire rally, after US-Iran truce talks in Islamabad collapsed without resolution. Experts flag renewed West Asia tensions and volatility ahead.
The collapse of US-Iran truce talks in Islamabad has reignited fears of escalating West Asia tensions, just days after markets rallied on the initial ceasefire announcement—where US President Trump suspended strikes and Iran agreed to reopen the Strait of Hormuz.
That relief drove Sensex and Nifty 50 to nearly 6% weekly gains, snapping a six-week decline. However, Hariprasad K, founder of Livelong Wealth, warns: “During March 2026 escalations, Sensex corrected by 2,400 to 2,700 points in one session. A break below Nifty's 24,000 level could trigger sell-on-rise structure.”
Crude oil dynamics are pivotal. With risks to the Strait of Hormuz, Brent could surge to $110-$130 per barrel, fueling India's imported inflation, squeezing corporate margins, and weakening the rupee to 93-98 per dollar. RBI recently held its policy repo rate at 5.25%, projecting FY27 retail inflation at 4.6%.
Sectors may diverge: oil marketers like Indian Oil and BPCL face margin pressure, while upstream players like ONGC could benefit. Defensives such as FMCG and pharma may provide stability. Upcoming Q4 earnings from HDFC Bank and ICICI Bank will also shape sentiment. India VIX has eased to a three-week low but could spike again.
