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Indian equity benchmarks are likely to get a cautious start amid global trade uncertainty. However, some support may come later in the day with favourable factors like declining dollar index and rising expectations over China’s stimulus. 

Some of the key factors to be watched:

India’s EU trade deal faces a costly hurdle due to strict laws: The Global Trade Research Initiative’s (GTRI) economic think tank said that the European Union's (EU) aggressive environmental regulations, particularly the carbon tax, deforestation rules, and supply chain due diligence laws are one of the biggest hurdles in the negotiations for a proposed trade pact with India. It added that these regulations could impose additional costs on Indian exports.

Forex reserves decline by $1.78 billion to $638.698 billion: The RBI said India's forex reserves dropped by $1.781 billion to $638.698 billion in the week ended February 28. The overall forex kitty had jumped by $4.758 billion to $640.479 billion in the previous reporting week.

India eyes strong trade deal with US, aims to double trade: Finance Minister Nirmala Sitharaman on Saturday said India is looking for a good trade agreement with the US to promote economic growth and ensure smooth supply chains. She also said that amid a growing global tariff war, India will have to move smartly to guard against possible dumping of goods from countries that are facing higher US tariffs.

Want to consolidate trade ties with India: Italian Agriculture Minister Francesco Lollobrigida has called for the consolidation of reciprocal trade relations with India, highlighting the very strong relationship between the two governments.

Pharma stocks will be in focus: The Pharmaceuticals Export Promotion Council (Pharmexcil) sought a review of a new rule for drug exports that requires a product registration certificate from the national regulatory agency of the importing country or approval from the Indian regulator compulsory for issuing a no-objection certificate for shipments.

On the global front: The US markets ended higher on Friday on account of closely watched Labor Department report showed employment in the U.S. increased by slightly less than expected in the month of February. Asian markets are trading mixed on Monday after China announced retaliatory tariffs on Canadian agricultural imports. 

Back home, snapping two-day winning streak, Indian equity benchmarks surrendered early gains to close flat in a highly volatile trade on Friday as uncertainties over the global trade war sapped investor's risk appetite. Traders also remained cautious ahead of key macroeconomic data, i.e., inflation data and industrial production data, which are due on March 12.

Some of the important factors in trade: 

Uninterrupted foreign fund outflows: Foreign institutional investors (FIIs) offloaded equities worth Rs 2,377.32 crore on a net basis on Thursday, according to exchange data. 

Crude oil prices rose: Crude oil prices settled higher, supported by easing U.S. tariff concerns and expectations of further economic stimulus from China. The Trump administration’s temporary exemption for automakers in Mexico and Canada from the newly imposed 25% tariffs helped lift sentiment. 

India’s real GDP growth to be steady at 6.5% in fiscal 2026: Crisil Intelligence in a report stated that India’s real GDP growth would be steady at 6.5 per cent in fiscal 2026 despite uncertainties stemming from geopolitical turns and trade-related issues led by US tariff actions.  

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