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Below the Quote on Daily Market Commentary for May 20th 2026 by Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd

Markets are likely to remain cautious in the near term, amid an unfavourable macro backdrop marked by continued weakness in the rupee, elevated Brent crude prices near USD 111/bbl, and high US bond yields, all of which are tightening financial conditions and weighing on sentiment. FIIs turned net sellers after three consecutive buying sessions, while the rise in domestic G-Sec yields to six-week highs could delay the lending rate relief that markets were anticipating. Indian equities ended largely flat on Wednesday amid weak global cues and macro concerns. The Nifty 50 closed marginally higher by 0.2%, while broader markets remained subdued with the Midcap100 gaining 0.5% and the Smallcap100 ending nearly flat (+0.04%).  Bond markets are pricing in re-accelerating inflation — the US 30-year yield crossed 5.1%, a 19-year high, while the 10-year moved above 4.5%. Rising US yields make dollar assets incrementally more attractive, pulling capital out of emerging markets, weakening the rupee, and pushing Indian G-Sec yields higher simultaneously. The rupee fell 20 paise to a fresh all-time low of 96.90 for the seventh consecutive session, with the 10-year G-Sec yield climbing to 7.1–7.13%. It is a self-reinforcing loop. Separately, peak power demand hit an all-time high of 260.45 GW amid intensifying heat wave conditions, with temperatures expected to rise further — a clear positive read-through for power utilities, AC manufacturers, and summer beverage names. Diplomatically, US Secretary of State Rubio's India visit (May 23–26) and the India-Italy "special strategic partnership" spanning defence, AI, clean energy, and IMEC provide a longer-runway thesis for defence and infrastructure plays.

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