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Indian equity benchmarks are likely to get a positive start tracking firm global cues. However, upside may remain capped amid foreign fund outflows. The Foreign institutional investors (FIIs) extended their selling on tenth day on March 5 as they sold equities worth Rs 2895 crore. Investors will keep a close eye on tariff related developments by the US and its trading partners, interest rate decision by the European Central Bank.

Some of the key factors to be watched:

India looks at ways to navigate Trump's reciprocal tariff: With US President's threat of reciprocal tariff raising concerns of a global trade war, India is seeking a mutually agreeable solution to the challenge under the broader framework of a trade deal with Washington.

RBI to inject Rs 1.9 lakh crore liquidity into banking system: In a bid to inject liquidity into the banking system, the Reserve Bank of India (RBI) has announced that it will conduct open market purchases of government securities and USD/INR swaps, amounting to around Rs 1.9 lakh crore in March.

Engineering goods exports to US surge 18% in Jan, but tariff threat looms large: EEPC India's engineering goods exports to the United States recorded an 18 per cent year-on-year growth in January 2025, reaching $1.62 billion, even as overall engineering shipments grew at a modest 7.44 per cent.

Private investments may drop below 11% of GDP: After declining to a three-year low in FY24, India Ratings said the private sector investment is expected to fall below 11 per cent of the GDP in FY25, based on the trends from the latest national accounts data and company fillings.

Coal industry stocks will be in focus: The Ministry of Coal said the total coal production from captive and commercial mines for the financial year 2024-25 has reached 167.36 million tonnes (MT) as of February 2025.

On the global front: The US markets ended higher in choppy trading on Wednesday, as investors cheered the likely easing of trade tensions between the U.S. and major trading partners. Asian markets are trading mostly higher on Thursday, as Wall Street rose overnight after U.S. President Donald Trump postponed tariffs on certain automakers.

Back home, Indian equity benchmarks staged a strong rebound on Wednesday and ended with gains of over a percent on a flurry of buying by investors amid a strong rally in Asian markets. Finally, the BSE Sensex rose 740.30 points or 1.01% to 73,730.23, and the CNX Nifty was up by 254.65 points or 1.15% to 22,337.30.

Some of the important factors in trade: 

Improvement in February PMI figures: India's services sector activity witnessed a sharp uptick in February boosted by improving domestic and international demand, which resulted in a quicker expansion in output and a substantial increase in employment. The seasonally adjusted HSBC India Services PMI Business Activity Index rose from January's 26-month low of 56.5 to 59.0 in February.

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. 

Easing crude oil prices: Oil prices continued their downward trend for the third straight session as concerns over global growth and OPEC+'s decision to increase production in April weighed on sentiment.

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