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Below the Quote on Daily Market Commentary for May 14th, 2026 by By Siddhartha Khemka, Motilal Oswal Financial Services Ltd

The near-term outlook remains cautious despite Indian markets witnessing a strong rebound in the past two sessions. Persistent foreign outflows, elevated crude oil prices (around USD 105 per barrel) and the Indian rupee slipping to fresh record lows (95.9/USD) continue to pose key macro risks for the domestic market. At the same time, the lack of any visible resolution in the West Asia conflict continues to keep global investors on edge and maintain uncertainty across financial markets. Adding to these concerns, India’s wholesale inflation surged to a 42-month high of 8.3% in April, raising fears of persistent inflationary pressures, margin stress and a potentially delayed rate-cut cycle by the RBI.  With the earnings season also nearing completion, market focus is gradually shifting back toward global macros, geopolitical developments and policy-related triggers, including the ongoing US-China talks focused on improving trade relations and securing major business deals, along with PM Narendra Modi’s five-nation visit for potential announcements related to bilateral defence cooperation and energy security agreements.   Additionally, India is also considering reducing taxes on bond investments by foreign investors to attract overseas capital inflows and improve participation in domestic debt markets. The proposal is expected to support the rupee, ease liquidity conditions and enhance the attractiveness of Indian government bonds for global investors. Separately, India has banned exports of raw, white and refined sugar till 30^th Sep’26, amid concerns over tightening domestic supply and lower-than-expected production, with the move aimed at ensuring adequate domestic availability and stabilising local sugar prices.  On Thursday, the Nifty closed at 23,690, gaining 1.2%, while broader markets were mixed, with the Midcap100 index rising 1.1% and the Smallcap100 index ending flat. Sectorally, Nifty Metal, Healthcare and Pharma stocks led the gains, while IT shares continued to remain under pressure amid concerns over intensifying global AI competition. The rally in metal stocks was further supported by strong global copper prices, while defensive buying interest emerged in pharma and FMCG names amid heightened market uncertainty. Looking ahead, Indian markets are likely to remain sensitive to developments in the West Asia conflict, movement in energy prices and trends in foreign fund flows. While the recent rebound indicates selective buying at lower levels, elevated inflation, currency weakness and persistent geopolitical uncertainty are expected to keep overall sentiment cautious.

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