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Indian equity benchmarks are likely to start on a cautious note amid growing concerns over escalating trade tensions due to a potential 25 per cent tariff on steel and aluminum imports, as announced by US President Donald Trump. Meanwhile, the Bharatiya Janata Party won the Assembly elections in Delhi over the weekend.

Some of the key factors to be watched:

FPIs' selling continues: The exodus of FPIs from the Indian equity markets continued unabated, as they withdrew over Rs 7,300 crore (about 840 million) in the first week of this month due to global trade tensions, with the US imposing tariffs on countries such as Canada, Mexico, and China.

India's exports likely to touch record $800 billion this year: Commerce and Industry Minister Piyush Goyal said India's exports are growing significantly and would achieve a record $800 billion in 2024-25 fiscal year. He added exports have been growing and have risen significantly in the last four years. This year also, there will be growth.

India's forex reserves rise: The RBI said India's forex reserves rose $1.05 billion to $630.607 billion for the week ended January 31. In the previous reporting week, the overall reserves had increased by $5.574 billion to $629.557 billion.

Auto stocks will be in focus: Data from the Federation of Automobile Dealers Association (Fada) showed that sales of electric vehicles (EVs) in the country surged 19.4 per cent month-on-month (M-o-M) and 17.1 per cent year-on-year (Y-o-Y) to 169,931 units in January.

There will be some buzz in life insurance company’s stocks: The new business premiums (NBP) of life insurance companies in January 2025 dropped by 8.15 per cent year-on-year (Y-o-Y) to Rs 30,825.17 crore, tracking a fall in Life Insurance Corporation of India’s (LIC) premiums and a minor moderation in private life insurers’ premiums.

On the global front: The US markets ended lower on Friday after President Donald Trump said he plans to announce reciprocal tariffs on many countries next week, following weak jobs and consumer sentiment data. Asian markets are trading mixed on Monday after U.S. President Donald Trump repeated warnings of imminent tariffs including on steel and aluminium, an inflationary move that could limit the scope for rate cuts.

Back home, in a volatile session, Indian equity benchmarks ended lower for the third consecutive session on Friday as the Reserve Bank of India has lowered its GDP growth projections for the first and second quarters of the fiscal 2025-2026 amid the concerns over the protectionist trade policies by US president Donald Trump. Finally, the BSE Sensex fell 197.97 points or 0.25% to 77,860.19, and the CNX Nifty was down by 43.40 points or 0.18% to 23,559.95.

Some of the important factors in trade:

Profit-taking amid foreign fund outflows: Foreign institutional investors (FIIs) offloaded equities worth Rs 3,549.95 crore in the capital markets on a net basis on Thursday, according to exchange data. 

RBI Rate cut to boost India's economic growth: India Inc cheered the RBI's move to slash the benchmark interest rate for the first time in nearly five years and asserted that it will complement the consumption-boosting measures announced in the last week's budget, providing much-needed support to the economy. 

Union Budget absolutely non-inflationary: Emphasizing policy measures aimed at supporting businesses, startups, and encouraging voluntary tax compliance, Finance Secretary Tuhin Kanta Pandey has said that the Union Budget is absolutely non-inflationary.

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