India's 6% rally hangs on oil as April 22 ceasefire nears
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- India's equity indices climbed 6% last week, snapping a six-week losing run after a two-week truce announcement, though gains depend on whether oil prices and the ceasefire hold.
- Oil prices fell to $95.2/barrel Friday from nearly $120 in the immediate aftermath of war, but Kunal Sodhani of Shinhan Bank India said crude remains elevated in the $95–$100 range because no definitive agreement exists.
- The rupee depreciated 10% in FY26, closing at 94.83/$ on March 31 (from 85.75/$ in April), with over 4% of the drop concentrated in March alone after the war started.
- Reserve Bank of India issued two back-to-back circulars on March 27 and April 1 restricting offshore-onshore arbitrage trades, and is expected to step up intervention around the 94.80/$ record closing low.
- Reuters reported three fully laden super-tankers passed through the Strait of Hormuz on Saturday; the waterway accounts for a quarter of global oil trade.
- Sham Chandak of Elios Financial Services expects a gap-down opening if ceasefire talks fail but said "there should not be panic," while A Balasubramanian of Aditya Birla Sun Life AMC noted volatility is likely and "a strong outcome can't be expected in a single day of talks."
- Anindya Banerjee of Kotak Securities said RBI curbs have shut most speculative trades, leaving only hedgers and market makers—thinner liquidity but "stability is more important at this point."
Why it matters: Indian equity holders and rupee holders face a binary outcome tied to April 22: if the ceasefire collapses and oil revisits $120 levels, the RBI's March 27 and April 1 arbitrage curbs will be the last line of defense at 94.80/$—the FY26 closing low after a 10% slide from 85.75/$. Without those curbs, Sham Chandak expects a gap-down; without a durable truce, the rupee's capped 92.40–92.50 upside evaporates.
