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Indian equity benchmarks are likely to get a gap-down opening as caution remaining over a global rebound after President Donald Trump’s decision to impose tariffs and sanctions on Colombia for impeding his immigration goals. Foreign fund outflows and weak rupee likely to dampen sentiments in the markets. 

Some of the key factors to be watched:

FPI incessant selling continues: The exodus of FPIs from the Indian equity markets continues unabated, as they withdrew Rs 64,156 crore ($ 7.44 billion) this month so far on depreciation of the rupee, rise in the US bond yields and expectation of a tepid earning season.

Forex reserves decline: The RBI said India's forex reserves dropped by $1.88 billion to $623.983 billion in the week ended January 17. Earlier, the overall kitty declined by $8.714 billion to $625.871 billion in the week ended January 10.

Weaker rupee seen as boost for exports: The apex exporters' body FIEO said a weaker rupee is often seen as a boost for Indian exports by making goods more competitive globally, but the reality is more complex.

Exports to US rises in Apr-Dec in FY25 on high demand: The government data showed that the country's exports rose by 5.57 per cent to $59.93 billion during April-December this fiscal on account of healthy demand in the American market for domestic goods.

Auto stocks will be in focus: SIAM data showed that automobile exports from India rose 19 per cent year-on-year in 2024 led by a robust dispatch of two-wheelers, passenger vehicles and commercial vehicles. Overall shipments rose to 50,98,810 units last year, up 19 per cent from 42,85,809 units exported in 2023.

On the global front, the US markets ended lower on Friday as investors stepped back while they digested a mixed bag of economic data and earnings reports and prepared for a week filled with economic releases and a Federal Reserve meeting. Asian markets are trading mixed on Monday with Australian, Taiwan and South Korean markets were closed for holidays. Besides, China to promote development of index investment products to shore up equity market.

Back home, Indian equity markets witnessed volatility in Friday’s trading session and ended in a negative terrain amid foreign fund outflows. Finally, the BSE Sensex fell 329.92 points or 0.43% to 76,190.46, and the CNX Nifty was down by 113.15 points or 0.49% to 23,092.20.

Some of the important factors for the markets:

Indian private sector companies witnessed slowdown in growth: Sentiments got hit, after the latest HSBC ‘flash’ PMI data report, compiled by S&P Global, has showed that Indian private sector companies started 2025 with a slowdown in growth, amid slower growth in new business intakes and aggregate output. 

U.S. President pressured OPEC: Traders got some relief as crude oil prices fell after U.S. President Donald Trump pressured OPEC and its de facto leader Saudi Arabia to lower prices in a broad push to drive up crude production.

Rupee weakest performing currency in Southeast Asia: Sentiments were cautious as Moody's Ratings said the Indian rupee has depreciated by around 5 per cent in the last two years and has fallen by 20 per cent in the last five years making it one of the weakest performing currencies in South and South East Asia.

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