Will Rate Hikes CRASH the Indian Market or SAVE the Rupee? Defence Stocks Rise | Alok Jain

追加: 2026-05-21

[00:00:01]Hi folks. So Bloomberg reported that RBI is considering options to boost the rupee and uh that they will achieve by rate hikes. Now rate hike is a very very uh tricky maneuver especially when the economy is not in top gear and it can really uh you know dampen the already existing uh poor spirits in the markets.

[00:00:35]The need for rate hike is very obvious.

[00:00:37]the money is creating outside of India and to retain or to attract new capital in your rates will have to be high. So if you compare Indian rates let's say Indian bonds are at 6% or US bonds are at 5%.

[00:00:57]the gap between the two is only you know only so much unless you create a differential between Indian rates and other rates depending upon the uh you know attractiveness of that country or that currency you will need much higher rates to attract and that's what is likely to happen that our rates although our economy didn't need rate hike but because we are competing with other uh countries where yields have gone up, Japan yield has gone up, US yields are going up, Europe yields are going up. So the interest rates will have to rise in this kind of environment and perhaps that will stop the currency from uh you know diving every day and on this news Indian rupee stabilized a bit today. We were at 96.9 yesterday and close to 96.2 improve society gain some confidence coming back uh that is very good in terms of where we going u the 21st of May uh daily bite let's look at some charts and let's also see where uh the markets are going absolutely flat once again so you can See, it's almost like a uh alternating mechanism. Last six sessions up, down, up, down, up, down. So, the market doesn't want to go anywhere.

[00:02:35]In some sense, this is not such a bad signal from the market. If you try to read what the market is telling you, the market is saying, regardless of whatever you're throwing at me, I am stabilized here.

[00:02:50]This gap also has not been completely covered. So reading the internals of the market, the market is not looking very weak. That's what I would gather out of this kind of a scenario. Uh of course uh we are in the hopefully in the final stages of the u war getting resolved if I may say. Uh Iran has given a proposal. Trump has rejected it but Trump has also said that we are in the final days of uh coming to some kind of conclusion. uh crude oil has come off on this news. Um it does seem again like you know perhaps we are coming to some closure on this and and and the markets are reacting accordingly.

[00:03:35]Small caps gained 0.71% today. Banks were down 23% midcaps absolutely flat and nifty next 50 were up 0.21%.

[00:03:46]Gold was flattish 0.67% 67% oil as I mentioned has come off from $112 yesterday to $104.

[00:03:55]Given that there was a $67 drop in crude oil from yesterday afternoon till now, the markets didn't really rally on that news also. I think the markets are waiting for what is the final outcome of this once and for all and and that's where you know the stagnation is there.

[00:04:14]Hindustan Levers, Nestle, Tata Consumers, Bharti Atel, OMGC, Reliance, Bajage Finance, NTPC, uh all these stocks were driving the market down.

[00:04:25]There were good gains in metals, some good gains in uh Bajage Auto, um HDFC Life, Adani Ports, Indic.

[00:04:36]In the Nifty Nex50 space, you had good gains in IOC, Motherson, Enron, Hyundai and so on. Bosch, Jindel Steel, Bthoot and De Lab were the ones which were weak today. Move of the day segment belongs to Jubilant Foodworks minus 8% for the day. Domino's is the brand that Jubilant Foodwork owns in India and the Q4 results is not so good. So perhaps people are not having many pizzas these days. Hanot on the other hand which is Honeywell Automation jumped hugely plus 16%. Uh huge dividend outcome also 110 rupees a share. You can see that this is clearly a a a head and shoulders pattern getting completed and perhaps the uh target here uh could be as high as 40,000 basis that uh so good move on this stock sectoral trends um very good move on defense today. So the sectoral uh roundroin continues to take place. Uh defense is up 1.38%, real estate is up 0.89%.

[00:05:47]Uh for the week they are absolutely flat. So earlier days they were down but today they are up and uh these two are the leading sectors for the day. On the downside you have it which is down 6%, capital market also down6, FMCG.5%.

[00:06:04]And in fact towards the end of the day ITC also came out with results uh which didn't look very impressive to me but I mean the the stock price anyways is is is reeling under a lot of uh draw down right now. Um 1 month change on FMCG is again flat.

[00:06:24]Pharma and capital markets are the only ones which are really standing out for the last one previous session. Sorry, uh defense stocks like MT, Dynamatic, Paris, data patterns and equis these were leading the defense sector higher. Previous session of US markets again a great session. So it did seem like a couple of days back that the bull market in this uh semiconductor AI space is dying but again a big move up there. AMD up 8%, Intel up 7.3%.

[00:06:59]Uh Goldman Sachs also joining in 5.7%. G Aerospace and GM all up 4 to 6%. Some of these stocks could be part of the weekend investing US stock strategy. The indices jumped up 1% on S&P 1.3% on Dow Jones, 1.6% 6% on NASDAQ and 2.56% on Russell 2000. So I think the US market is more enthused about this potential uh conflict ending than India market. Uh certainly the jump there ideally would have been replicated here but we are having some more worries on interest rate front etc also. The markets were higher in the morning for us but then by the afternoon they did give up some of the gains. You can see here this pocket right here ASML, MU, AMD, Intel, uh ARM all doing exceedingly exceedingly well.

[00:07:48]Um not too many losers except Walmart and Costco along with Netflix. There tweet of the day uh segment we have a tweet from Sumit Bahal. The richest people in the world are Americans who own tech companies.

[00:08:05]So he has listed the top 10 richest folks.

[00:08:09]There is no sign of um Mr. Amani or Mr. Adani in these uh lists. Total net worth ranges from $150 billion to $667 billion in just this last year to date change.

[00:08:25]Uh some of them have really gone up very rapidly. Elon Musk and Larry Page especially.

[00:08:32]Only one or two names are non- tech names here. So Jim Balton and Bernard Arnold are the only two names which are not technology names. So technology as an industry as a sector has been the real puller of the US markets. Beyond that you will find that not too many sectors are doing so well and that probably remains the biggest strength of the US economy that they have been able to uh you know unshackle the uh the technology front um and and and and be a global leader in that that probably will remain one of their biggest assets uh going forward. Um we many discussions in the last few days on how India has really lost this train and we really need to catch up. Uh it doesn't seem like there is any war room in India right now to really uh you know put us uh on a path ahead. Uh there is there is some discussion but really there is u you know there seems to be no urgency. Let's put it this way. and and that is a problem that we have to face uh in the Indian markets.

[00:09:47]Nevertheless, I'm not so pessimistic on the Indian market. I think given the fact that the markets are stable despite the headwinds that we are seeing um is a sign that if there is any tailwind that we get, we probably will fly off. That is for sure. And just to sort of also make people uh remember about 1988 to 1991 1992 period where for in four years or 5 years if I remember correctly the rupee went from 14 rupees to a dollar to 32 rupees to a dollar and it virtually crashed through that period while this markets were up 500% in the same time period. I'll do more of that study in tomorrow's uh daily bite. I hope you have a great evening. Thank you so much for watching this and do give us a subscribe if you watch us regularly.

[00:10:37]Thanks. Bye.