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Indian equity benchmarks are likely to get gap-down opening amid reports that the US President Donald Trump has confirmed that tariffs against Canada and Mexico will come into effect next week. Meanwhile, The Foreign institutional investors (FIIs) sold equities worth Rs 556 crore on February 27.

Some of the key factors to be watched:

India should push for provisions in FTA to address EU's carbon tax: The Global Trade Research Initiative (GTRI) said India should push for inclusion of protective provisions in its proposed free trade agreement (FTA) with the European Union to safeguard its interests against the EU's carbon tax.

Moderation in inflation creates policy space for RBI to cut rates: the National Council of Applied Economic Research (NCAER) in its the monthly economic review has said that moderation in inflation to five-month low of 4.3 per cent in January has provided RBI more space to cut interest rate in policy meet.

India requires crucial structural reforms: IMF reportedly said that India appears to be on course for sustained growth in the medium-term on the back of multiple factors but underlined the need for crucial structural reforms, including in judiciary, tariffs, labour regulations, along with stable regulatory regime. 

Auto stocks will be in focus: Ratings agency Icra said passenger vehicle sales volume in India is expected to grow at a moderate pace of 4-7 per cent in FY26 with most demand drivers remaining neutral or favourable.

Aviation industry stocks will be in limelight: The Directorate General of Civil Aviation (DGCA) data showed that domestic air traffic grew 11.28 per cent to 14.6 million in January compared to the year-ago period.

On the global front: The US markets ended lower on Thursday weighed down by a slump in chipmaker Nvidia after its quarterly report failed to rekindle Wall Street's AI rally, while investors focused on data pointing to a cooling U.S. economy. Asian markets are trading in red on Friday following US President Donald Trump's confirmation that tariffs on imports from Mexico and Canada will take effect next week.

Back home, Indian equity benchmarks exhibited a subdued performance and ended flat on Thursday as investors braced for heightened volatility ahead of the monthly derivatives expiry. Finally, the BSE Sensex rose 10.31 points or 0.01% to 74,612.43, and the CNX Nifty was down by 2.50 points or 0.01% to 22,545.05.

Some of the important factors in trade:

FII's selling continues: Foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,529.10 crore in the capital markets on net basis on Tuesday, according to exchange data. 

US Treasury yields rise: U.S. Treasury yields were higher as investors anticipated further economic data and digested U.S. President Donald Trump’s latest tariff threats.

Crude oil prices fall: Crude oil prices fell as hopes for a potential peace deal between Russia and Ukraine continued to pressure the market. Additionally, concerns over U.S. trade policies, including tariffs imposed by Donald Trump, raised fears of economic slowdown, further weighing on oil demand.

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