Markets sensitive to Middle East conflict | FMCG, Mining & Metals Strong | Market Outlook – May 2026

Added: 2026-05-19

[00:00:00]Hello, welcome to Mirror Asset Sharan's market outlook for May 2026. My name is Ankit Sony and I'll take you through an in-depth replay of key developments and a forward glance at what lies ahead for investors. Also stay tuned till the end of our market cap wise talk report card trending sectors and investment strategy across market caps in the present market scenario. Let's begin with the recap of what all happened in the last month.

[00:00:36]After the route in March, April turned out to be strongest month for the benchmark indices in over 2 years. The Nifty rose around 7% and Sensex around 6.9% in April, clocking their best show since December 2023, partially reversing the 11% fall in March. The announcement of a ceasefire between US Iran around an April 7th and attractive stock valuations added a rally even as FIS continue to flee amid the heated geopolitical climate. Broader markets to deliver stronger gains than the benchmarks in April. While the Nifty small cap surged 18.4%, Nifty Midcap climbed 13% and micro cap around 21%.

[00:01:24]Nifty 500 added 10%.

[00:01:29]Geopolitical scenario. However, the USI Israel Iran conflict continues to remain the biggest global trigger for financial markets since both parties are unwilling to compromise on the nuclear issue. A comprehensive solution to the war is not materializing and the key energy flow route through the state of Hormos remains under blockade from both sides.

[00:01:56]Crude oil just plunged by over 12% towards April end with Bren futures falling below dollar 100 per barrel on hopes of prolonged peace stocks.

[00:02:08]However, rising concerns over energy supply disruptions pushed Brent crude oil prices near dollar 105 to 110 per barrel. Overall swinging widely between the hopes of peace deal and renewed war tremors markets will remain volatile.

[00:02:30]Here are the trending sectors. The first is FMCG. Indian FMCG industry is witnessing a strong rebound with expectations of healthy volume growth in financial year 27 after a period of volume moderation in late 2024 and 25.

[00:02:46]Key growth drivers include revival in rural consumption, exponential rise of quick commerce, focus on premiumization and digital transformation. The market is projected to grow significantly at CAGR of 17% over 25 to 30 with estimate suggesting potential to reach $643 billion by financial year 30. However, input cost volatility is likely to squeeze operating profit margins in near-term. Despite the optimistic outlook, the sector is vulnerable to risk such as supply chain disruptions leading to rise in input cost and delays, unpredictable monsoons and extreme weather conditions. In spite of this risk, the overall trajectory is robust. In the long run, India remains one of the world's most attractive FMCG markets. We are covering another sector, mining and metals. [snorts] In April 2026, crude steel output increased by 6% yearonear to 14.09 09 million tons while finished steel consumption increased by around 8% to 12.99 million tons employing ongoing strength in the building infrastructure and manufacturing end use sectors. India's per capita steel consumption remains much lower than the global average implying a sharp structural uptrend.

[00:04:16]Upside momentum in the metals continues to strengthen in May driven by easing geopolitical issues, rapid expansion in infrastructure, power, cement, automoils and EVs. Also in the context of financial performance among all sectors, this would remain in favor. Overall, steel and mining players are likely to give better margins in quarter 4 financial year 26.

[00:04:46]What should be the strategy? We recommend buy on dip strategy for May 2026.

[00:04:53]On the screen are the key resistance and support figures. [snorts] The verdict overall Indian stock markets would remain headline sensitive closely monitoring news flows about the deal that can potentially end the West Asian conflict. While a potential peace deal between the US and Iran would certainly be positive for the Indian market, crude oil prices remain the key variable to watch. Risk sentiments have not worsened much as investors continue to see the Iran conflict staying contained and ending sooner than later. That's all for our market outlook. What are your views on the market this month? Share your thoughts in the comments today. Access all our research offerings in just a few clicks. Visit research.sharcan.com to get daily calls and detailed reports across equity, mutual funds, FNO, commodities, and more. Scan the code on the screen to start your 15-day trial.

[00:06:02]Thank you for watching.

[00:06:08]Investment in securities market is subject to market risk. Read all related documents carefully before investing.