The talks between Iran and the US in Pakistan, which ended without a deal, would weigh heavily on investors’ sentiment when markets open for trading on Monday, analysts said.

Besides developments related to West Asia, crude oil prices would also dictate market trends in a holiday-shortened week ahead, they said.

Stock markets will remain closed on Tuesday for Baba Saheb Ambedkar Jayanti.

The talks between Iran and the US in Pakistan have ended without a deal due to “excessive demands” made by the American side, a top Iranian official said on Sunday.

Iranian Foreign Ministry spokesperson Esmaeil Baqaei, however, emphasised that “diplomacy never ends”.

US Vice President JD Vance, who led the American delegation, said the talks failed to reach a peace deal, citing Tehran not forgoing its nuclear programme as one of the key sticking points.

He said the American side presented its “final and best offer” to the Iranian side, but it did not accept it.

Baqaei, however, said the two sides reached a consensus on some issues, but they held different views regarding “2-3 important matters”.

“Finally, the talks did not reach an agreement,” he was quoted as saying by the state-run Press TV.

Markets had rallied last week following the US-Iran ceasefire and a sharp decline in crude oil prices, which dropped below the USD 100 mark. Last week, the BSE benchmark Sensex jumped 4,230.7 points, or 5.77 per cent, and the NSE Nifty surged 1,337.5 points, or 5.88 per cent.

“The Nifty-50 enters the upcoming week at a critical inflexion point. After staging a sharp recovery and reclaiming the 24,000 mark, the market had begun to reflect cautious optimism,” Hariprasad K, Research Analyst and founder, Livelong Wealth, said.

However, the collapse of peace talks between the United States and Iran has materially altered the near-term outlook, he added.

“With negotiations ending without a resolution, markets are now bracing for a return of volatility that characterised earlier phases of the conflict,” he said.

Benchmark indices are expected to open with a significant gap down, potentially erasing a portion of the recent ceasefire rally, Hariprasad added.

Stock markets would also track inflation data announcements, Q4 earnings and trading activity of foreign investors this week.

“With the onset of the Q4 FY26 earnings season, key results from heavyweight companies, such as Wipro, HDFC Bank, and ICICI Bank, will be closely monitored, along with several others. On the macro front, important data releases include CPI inflation (April 13), WPI inflation (April 14), which will provide insights into inflation trends,” Ajit Mishra SVP, Research, Religare Broking Ltd, said.

Foreign investors maintained their aggressive sell-off in Indian equities, withdrawing Rs 48,213 crore (USD 5.14 billion) this month.