US-Iran peace talk failure to hit market recovery; rupee; oil may see setback

GDP may be greater than on inflation, as the government will try to shield vulnerable consumers using policy tools, and in the worst case, growth may possibly be lower by 60-100 basis points,” added Shukla.The failure of talks could impact the stock market's fledgling recovery from its 52-week low, and unsettle the currency and energy markets."This is bad news and puts the recent recovery at risk," said Nirmal Jain, founder of IIFL Group, advising investors to wait rather than rush in to buy a likely dip.The bellwether Nifty had recovered 8.4% from its 52-week low of 22,182.55 on 2 April to Friday's closing of 24050.6. A further recovery toward the pre-war level of 25,178.65 on 27 February, which analysts had expected ahead of the peace talks, looks like a "tough ask," said Rohit Srivastava, founder of analytics firm IndiaCharts.While analysts including Srivastava do not believe the market will test its 52-week low again unless the fighting widens, options traders have baked in a 23,000-25,000 range for the Nifty in April.

The downside pressure will be led by foreign portfolio investors (FPIs), who have sold a whopping $20.5 billion in the cash market in 2026, already three-quarters of the record $27.35 billion outflows seen in 2025.The rupee has depreciated nearly 5% against the dollar since the war started, shedding 11% in FY26 due to continuous selling by foreign portfolio investors. On Friday, it closed at 92.73 per US dollar.“With the setback in round one of talks, the market will reverse some of its gains,” Gopal Tripathi, head of treasury at Jana Small Finance Bank said.

“The Indian rupee may react negatively, but the extent of weakness will be guided by the jump in crude prices. 93.50 may act as good resistance