NewKerala.com

Indian Markets Brace for Volatile Monday After US-Iran Talks Fail

Indian stock markets are anticipated to face volatility on Monday following the unsuccessful conclusion of US-Iran negotiations. Analysts note a cautious sentiment, with Foreign Institutional Investors being net sellers, though domestic institutional inflows have provided key support. The market's direction hinges on geopolitical tensions and crude oil price movements. Prolonged conflict could negatively impact India's macroeconomic indicators and deter foreign investment.

Key Points: Indian Stock Market Volatility Forecast After US-Iran Talks

  • US-Iran talks fail to reach deal
  • FIIs net sellers with Rs 20,700 crore weekly outflow
  • Domestic institutional investors provide crucial support
  • Market sentiment balanced but cautious
2 min read

Experts predict volatile Monday for Indian stock markets after US-Iran talks fail to negotiate deal

Experts predict a volatile Monday for Indian stocks as failed US-Iran negotiations and FII outflows weigh on investor sentiment.

"bad news for Iran more than it's bad news for the United States of America - JD Vance"

New Delhi, April 12

Indian stock markets are likely to witness volatility when trading resumes on Monday, with analysts noting that investor sentiment could hinge on the disappointing negotiations between the US and Iran, which concluded on Sunday without reaching an agreement to end the war.

US Vice President JD Vance stated that while substantive discussions took place during the talks, the lack of agreement is "bad news for Iran more than it's bad news for the United States of America".

According to Ponmudi R, CEO of Enrich Money, the overall sentiment is "balanced but cautious," with the downside relatively contained but upside momentum constrained. Foreign institutional investors (FIIs) have been net sellers, with cumulative weekly outflows of over Rs. 20,700 crore, although they turned net buyers in Friday's session, he said.

"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," Ponmudi R said.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said that Foreign Portfolio Investors (FPI) selling has continued in April, with total outflows reaching Rs 1,90,046 crore. The energy crisis triggered by the West Asia conflict, potential impact on the Indian economy, and sustained rupee depreciation have kept FPIs on sell mode.

Experts believe that if there's de-escalation in the conflict and crude prices decline significantly, India's macros won't be impacted materially. However, if the conflict prolongs, India's macros will be affected, making it unrealistic to expect FPIs to turn buyers.

Domestic institutional investors have provided crucial support, with net inflows of Rs 21,600 crore, absorbing selling pressure and stabilizing indices near key support levels. Vijayakumar noted that strong mutual fund flows into the market, with equity mutual flows surging to Rs. 40,450 crore and monthly SIP inflows to Rs. 32,087 crore in March, bode well for the market.

- ANI

Share this article:

Reader Comments

P
Priya S
Every time there's tension in West Asia, we feel the pinch. Petrol prices will shoot up again, and inflation will follow. It's the common man who suffers the most in these situations. Hope sense prevails and a deal is reached soon.
V
Vikram M
The FPI outflow figure of nearly 2 lakh crore is staggering. While DIIs are holding the fort, we can't rely on domestic money alone forever. Global investors need confidence in India's stability. Monday might be a good day to buy the dip for long-term investors.
S
Sarah B
As an NRI investor, this constant volatility is frustrating. The SIP story is impressive, but the macro risks are real. A prolonged conflict will hurt the rupee and corporate earnings. The RBI has a tough job ahead.
R
Rohit P
Experts always say the same thing - "volatility", "cautious", "downside risks". 😅 The truth is, retail investors like us just have to stay invested through SIPs and ignore the noise. The 40k crore equity inflow in March shows many are doing just that.
K
Karthik V
While the analysis is sound, I respectfully disagree with the notion that it's "bad news for Iran more than the US." For an oil-importing nation like India, any global instability that spikes crude prices is very bad news for us. Our trade deficit will widen.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50