Analysts expect volatile Monday for Indian stocks after US–Iran talks end without deal
New Delhi, April 12: Indian stocks are poised for a volatile start to the week, with analysts cautioning that sentiment could be unsettled on Monday after talks between the United States and Iran concluded on Sunday without an agreement to end the war.
US Vice President JD Vance said the discussions were substantive but yielded no deal, adding that the outcome is “bad news for Iran more than it’s bad news for the United States of America.” The impasse keeps geopolitical risk in focus for investors, particularly through the channel of crude oil prices.
Ponmudi R, CEO of Enrich Money, described the overall market mood as “balanced but cautious,” noting that downside appears relatively contained while upside momentum is constrained. He said foreign institutional investors have been net sellers, with cumulative weekly outflows of over Rs 20,700 crore, though they turned net buyers in Friday’s session.
“A renewed escalation in tensions or a sharp rebound in oil prices could reintroduce downside risks. Conversely, continued moderation in crude prices, alongside supportive global cues, may prompt short-covering and lend near-term support to markets,” he said.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said Foreign Portfolio Investors’ selling has continued in April, with total outflows reaching Rs 1,90,046 crore. He attributed the drawdown to the energy crisis triggered by the West Asia conflict, the potential impact on the Indian economy, and sustained rupee depreciation.
Domestic institutional investors have provided crucial support, he noted, with net inflows of Rs 21,600 crore helping absorb selling pressure and stabilise indices near key support levels. Vijayakumar added that strong mutual fund contributions bode well for the market, citing equity mutual fund flows of Rs 40,450 crore and monthly SIP inflows of Rs 32,087 crore in March.
Experts believe that if there is de-escalation in the conflict and crude prices decline significantly, India’s macros will not be impacted materially. However, if the conflict prolongs, India’s macros will be affected, making it unrealistic to expect FPIs to turn buyers in the near term.
With geopolitics steering oil and risk appetite, analysts said traders will be watching crude benchmarks and global cues closely for direction when trade resumes on Monday.