Indian stocks weather Trump's war flip-flop; rupee curbs help shares; smart ETF buying seen

Indian shares overcame negative geopolitical news and bounced back sharply from 1-year low levels as the central bank’s curbs on bearish positions in the Rupee helped bulls on a day when Donald Trump threatened to deepen America’s war with Iran. Cautious buying seen in select ETFs.

The 50-share Nifty closed modestly in the green after recovering 530 points, or 2.4 percent, from intra-day low of 22,182 points. This level was last since about a year ago. The Reserve Bank of India’s steps to tighten the noose on Rupee shorts also paid dividends. The currency, already the world’s worst performer YTD, surged 2% and rose for the 4th day as bearish speculative bets were unwound.

A strong currency helps stem FII sales, which hit a record 1.22 lakh crore in March alone.

The Nifty has plunged 16 percent since the start of the West Asian conflict on February 28th, making it the worst performing major index so far in 2026.

"We are close to the bottom if not there already,” said Amit Goel, Founder and Chief Strategist at Pace 360, a firm offering portfolio services to the wealthy. “It is not as bad as it looks.”

Goel said he was buying exchanged traded funds mimicking the Nifty, The Nifty Next 50 Index and the Private Bank Nifty Index on hopes of a bounce back in the near future.

Meanwhile, bulls were on a backfoot after US President Donald Trump shattered hopes of a quick and early end to US and Israel combined battle with energy-rich Iran in his early morning speech. Not only did Trump withdraw his ceasefire, he warned of massive military strikes to Tehran’s oil and power infrastructure as the West Asian conflict entered the second month. Iran says it will hit back.

As a consequence, crude oil prices surged between 7-11 percent whereas Indian equities plunged as much as 2-3 percent in opening quotes. New Delhi imports about 85% of its energy needs, most of it from the oil-rich Persian Gulf where the conflict is centered.

The Reserve Bank of India’s steps to tighten the noose on Rupee shorts also paid dividends. The currency, already the world’s worst performer YTD, surged 2% and rose for the 4th day as bearish speculative bets were unwound.

WORST OVER. STOCKS ABSORBING BAD NEWS

While stocks and indices continue to reel under constant earnings downgrades and heavy selling by foreigners, off late the pace of the fall has declined.

Madhu Kela, a veteran investor and a former fund manager, said earlier that markets typically stop reacting to bad news after falling substantially as most of the pain is baked in the price.

The jury may still be out but today seemed one such day.

Analysts have advised long term investors to remain calm in such turbulent times prompting them not to stop their monthly investments into the market.

Is the worst behind us? Only time will tell but for now the markets may have signaled their intention for the better.