Dawn of peace in West Asia: What can be the implications for investors?

The US-Iran agreement to end conflict and reopen the Strait of Hormuz has triggered a sharp correction in Brent crude from a peak of $119.5 to below $81, significantly easing macro headwinds for India. The rupee has appreciated from 96.96 to 94.5 per dollar, aided by RBI and government measures to attract capital inflows. The article expects FPI selling to taper, benefiting private banks and capital goods, while cautioning that elevated mid-cap and small-cap valuations (29x and 33x PE) warrant prudence.