FX.co ★ Sensex Retreats on Higher Oil Prices

India’s BSE Sensex dropped nearly 2% to 76,007 on Monday, erasing gains from the previous session, as higher oil prices weighed on sentiment following the failure of US–Iran peace talks to make headway. The lack of progress heightened concerns about global growth prospects and corporate profitability.

Negotiations in Islamabad ended in a stalemate, and US President Trump said on Sunday that the US Navy would begin enforcing a blockade of the Strait of Hormuz. The move further escalated geopolitical tensions and drove oil prices higher.

Foreign portfolio outflows have reached $5.15 billion so far in April. However, strong equity mutual fund inflows from domestic investors—rising to an eight-month high of $4.4 billion in March—helped limit the market’s downside.

On the macroeconomic front, India’s March inflation data is due later today, with consensus expectations of 3.48%, compared with 3.21% in February, an eleven-month high.

Sector-wise, financials, technology, and energy minerals led the declines. Among the major losers were Ola Electric (-4.1%), Cochin Shipyard (-2.2%), Reliance Industries (-2.7%), and HDFC (-2.5%).