IGI Logo

India's equity benchmarks are set for a muted start on Tuesday, after logging their steepest drop in more than two months in the previous session, as uncertainty over a U.S. trade deal and caution ahead of the Federal Reserve's rate decision weigh.

The Gift Nifty futures were trading at 25,964.5 points as of 8:03 a.m. IST, indicating that the benchmark Nifty 50 will open near Monday's close of 25,960.55.

U.S. Treasury Secretary Scott Bessent said on Tuesday that Washington is still working toward a trade deal with India, even as reports said the U.S. administration has signalled plans to impose tariffs on rice imported from India.

U.S. President Donald Trump unveiled a $12 billion aid package for American farmers on Monday, while threatening to impose tariffs on fertilisers from Canada.

Elsewhere, the MSCI's broadest index for Asia Pacific stocks outside Japan fell 0.3% as caution prevailed ahead of the Fed's policy decision. [MKTS/GLOB]

The Fed is expected to cut rates on Wednesday, but Wall Street banks have pencilled in fewer reductions for 2026 amid lingering inflation concerns and expectations of a more resilient U.S. economy.

Higher U.S. interest rates typically support the dollar and lift Treasury yields, making emerging-market equities less attractive to foreign investors.

Foreign investors sold Indian shares worth 6.56 billion rupees ($72.8 million) on Monday, per provisional data. They have sold Indian equities worth $1.3 billion so far in December.

STOCKS TO WATCH

** KRBL, LT Foods, Kohinoor Foods in focus on reports U.S. has signalled tariffs on agricultural products, including Indian rice and Canadian fertiliser

** Physicswallah posts 62% jump in consolidated profit for the quarter ended September 30 and a more than 26% rise in revenue

** India's largest airline IndiGo told aviation regulator that last week's flight cancellations were due to a combination of factors, including new pilot rest and duty rules and "minor" technical glitches

($1 = 90.1180 Indian rupees)