Rupee began the week in red, tumbling 48 paise to 93.31 against US dollar in early trade on Monday. This comes as geopolitical tensions around the Middle East continue to intensify and oil prices once again skyrocket beyond the $100 per barrel mark.Investor mood turned cautious after the ceasefire that had supported markets last week began to fade. At the same time, weekend talks in Pakistan failed yeild an agreement to end the war, further fueling uncertainty. In the aftermath, US President Donald Trump said on Sunday that the US Navy would begin blockading the Strait of Hormuz.Following the announcement, Brent crude for June delivery climbed 7% to $102 a barrel. At the same time, US equity futures and Asian shares fell, while US Treasury yields and the dollar moved higher, reversing last week’s trend.Meanwhile at home foreign investors continued to pull money out of Indian equities amid the uncertainty. In the first 10 days of April, foreign portfolio investors (FPIs) withdrew Rs 48,213 crore ($5.14 billion), according to NSDL data. This comes after a record outflow of Rs 1.17 lakh crore (about $12.7 billion) in March. In contrast, February had seen an inflow of Rs 22,615 crore, the highest in 17 months.So far in 2026, total FPI outflows have reached Rs 1.8 lakh crore. The continued selling reflects lower risk appetite among global investors.VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said that the energy crisis linked to the Middle East conflict, along with its possible impact on the Indian economy and weakening rupee, has kept foreign investors in a selling mode. He added that markets like South Korea and Taiwan are currently more attractive due to better earnings growth expectations compared to India’s outlook for FY27.Commenting on the failed peace talks between Washington and Tehran, banking and Market Expert Ajay Bagga said, “Last Wednesday, there was hope in the markets that something was coming by when the ceasefire and the talks were announced. But that momentum has faded. We are again getting negative on the Indian markets…We are suggesting to investors not to try to trade this market…Do your disciplined monthly investment through the SIP route...”Efforts to stabilise the situation faltered over the weekend, with the United States and Iran failing to reach an agreement.The conflict, which began on February 28, has continued to ripple through global markets. Following joint strikes by the US and Israel on Iran, Tehran has disrupted the Strait of Hormuz, a key global energy route that carries nearly 20% of the world’s fuel. As tensions in the Middle East continue to intensify, investors remain cautious, with developments around the Strait of Hormuz and the broader conflict continuing to shape movements across commodities, currencies and equity markets.