IGI Logo

Indian equity benchmarks are likely to start the week on a firm note, after a long holiday weekend, supported by positive cues from Asian markets following China's recent economic measures. However, traders likely to remain cautious as tariff-related developments and FII selling could lead to some volatility as the day progresses. Investors likely to remain on sidelines ahead of the Wholesale Price Index (WPI) data to be out later in the day.

Some of the key factors to be watched:

India, China sees strong Q4 2024 trade growth: A UN report said India and China saw strong trade growth in Q4 2024. UN report also warned of a potential for an economic slowdown globally in the upcoming quarters.

India, New Zealand resumes CECA talks: India and New Zealand have resumed negotiations for a Comprehensive Economic Cooperation Agreement (CECA) after a decade-long hiatus. The agreement aims to enhance trade in goods, services, and investments, potentially unlocking new business opportunities and improving market access. The discussions will focus on balancing outcomes that benefit both nations.

India’s forex reserve jumps: The Reserve Bank said India’s foreign exchange reserves increased by $15.267 billion to $653.966 billion during the week ended March 7.

India’s merchandise trade deficit will be under pressure in fiscal 26: Crisil said India’s merchandise trade deficit will be under pressure in the fiscal year 2026, as domestic private consumption is expected to remain strong, maintaining imports up

Banking stocks will be in focused: Rating agency India Ratings said the gap between credit and deposit growth in the banking system is expected to decline sharply to 80 basis points (bps) in the next financial year from an average of 386 bps over the FY22-Q3FY25 period.

On the global front: The US markets ended higher on Friday. Positive sentiment may have been generated in reaction to news the U.S. is likely to avoid a government shutdown after Senate Minority Leader Chuck Schumer, D-NY, said he would vote to advance a Republican spending bill funding the government through September. Asian markets are trading mostly higher on Monday after China pledged more steps to revive consumption.

Back home, Indian equity benchmarks reversed their early gains to close lower on Thursday due to selling in Realty, Auto and Consumer Discretionary counters. Finally, the BSE Sensex fell 200.85 points or 0.27% to 73,828.91, and the CNX Nifty was down by 73.30 points or 0.33% to 22,397.20.  

Some of the important factors in trade: 

Unabated foreign capital outflows: Foreign institutional investors (FIIs) offloaded equities worth Rs 1,627.61 crore on a net basis on Wednesday, according to exchange data.

Moderating India's retail inflation failed to cheer investors: Retail inflation slipped to 3.61 per cent in February mainly due to the decline in the rate of price rise in vegetables and protein-rich items, creating space for the Reserve Bank of India for second reduction in interest rate next month.

Private sector in India expects demand conditions to remain favourable: The HSBC India Business Outlook report, compiled by S&P Global, has showed that private sector companies in India expect demand conditions to remain favourable over the course of the coming 12 months, on the back of new projects in the pipeline and product differentiation, alongside advertising and tech investment. 

Above views are of the author and not of the website kindly read disclaimer