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Indian equity benchmarks are likely to get cautious start on Wednesday. Traders will be concerned with report that after levying 25-per cent tariffs, each, on Mexico and Canada, and an additional 10-per cent tariff on China, US' Commerce Secretary Howard Lutnick said overnight that President Donald Trump will probably announce tariff compromise deals with Canada and Mexico soon. However, some support may come amid fall in crude oil prices as plans by major producers to raise output in April. Investors will be looking ahead to the Services PMI data to be out later in the day.

Some of the key factors to be watched:

Govt steadfast in easing regulatory burdens, taking steps to make India export-friendly: Finance Minister Nirmala Sitharaman has said that the government remains steadfast in reducing regulatory burdens, besides enhancing trust-based governance and taking steps to make India a seamless, export-friendly economy.

Non-tariff measures limit market access for Indian exports: Director General of Foreign Trade (DGFT) Santosh Kumar Sarangi said non-tariff measures being announced by developed economies such as European Union's carbon tax and deforestation regulation limit market access for Indian goods in those markets.

Modern, responsive regulatory framework needed to create growth-conducive investment climate: Chief Economic Advisor V Anantha Nageswaran said India should have a modern, responsive regulatory framework to create a growth-conducive investment climate, as FDI inflows get impacted due to pressure on global growth.

India-US trade deal long overdue, it will boost GDP of both nations: As commerce minister Piyush Goyal and his US counterpart Howard Lutnick begun talks to strike an early bilateral trade deal, US-India Business Council (USIBC) of the US Chamber of Commerce ay said that non-tariff barriers and red tape should be dismantled with haste as it slows market access.

Power stocks will be in focus: Chairman of Central Electricity Authority (CEA) Ghanshyam Prasad said India is ready to meet the expected peak power demand of 270 GW this summer taking steps like mandating 17GW imported coal plants to run at full capacity till April and asking hydro projects to conserve water to meet sudden surge.

On the global front: The US markets ended lower on Tuesday with the tech-heavy Nasdaq veering near correction territory, as trade tensions escalated following U.S. President Donald Trump's new tariffs on Canada, Mexico and China. Asian markets are trading higher on Wednesday as US Commerce Secretary Howard Lutnick suggested the Trump administration may walk back some tariffs that sparked a global selloff in markets.

Back home, Indian equity benchmarks trimmed some of their early losses but ended marginally lower on Tuesday as weak global market, concerns over a global trade war, and continued foreign institutional investors (FII) selling have negatively impacted the domestic markets. Finally, the BSE Sensex fell 96.01 points or 0.13% to 72,989.93, and the CNX Nifty was down by 36.65 points or 0.17% to 22,082.65.

Some of the important factors in trade: 

FIIs continued to remain net sellers: Foreign Institutional Investors (FIIs) offloaded equities worth Rs 4,788.29 crore in the capital markets on a net basis on Monday, according to exchange data.  

FDI in India dropped 5.6% in Oct-Dec: Department for Promotion of Industry and Internal Trade (DPIIT) data showed that the foreign direct investment in India dipped by 5.6 per cent year-on-year to $10.9 billion in October-December quarter of this fiscal due to global economic uncertainties. 

Indian banks performed robustly in 9MFY25: Fitch Ratings stated that Indian banks have exhibited robust performance in the first nine months of the current financial year with the sector's impaired loan ratio close to the trough, and added that there is potential for improvement in impaired loan ratio for FY26.

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