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Indian equity markets are likely to make cautious start on Monday, ahead of the Q3 results season. Traders likely to adopt cautions approach ahead of the release of the India’s consumer price inflation data. Additionally, sentiments may remain subdued due to continued outflows from foreign institutional investors (FIIs).

Some of the key factors to be watched:

Forex reserves drop by $9.80 billion to $686.80 billion: The Reserve Bank of India (RBI) said that India's forex reserves dropped by $9.80 billion to $686.80 billion in the week to January 2.

Spain, Germany, Belgium, Poland emerging as key export destinations for India within EU: The Commerce ministry data said that Spain, Germany, Belgium, and Poland are emerging as stable and key export destinations for Indian goods within the 27-nation European Union bloc.

India, EU trade ministers direct officials to expedite FTA talks:  India and EU trade ministers have directed officials to resolve pending issues and expedite the negotiations to finalise the proposed free trade agreement. Both leaders provided guidance to negotiating teams to resolve pending issues and expedite the agreement.

FTAs to provide greater market access to agri, food processing sectors: Minister of State for Commerce and Industry Jitin Prasada said that the number of free trade agreements (FTAs) signed and implemented by India will provide greater market access to the domestic agri and food processing sectors.

India to focus on skilled jobs, employment quality to achieve inclusive growth: S Mahendra Dev, chairman of Economic Advisory Council to the Prime Minister (EAC-PM), has said that India's short term goals include focusing more on generating skilled jobs and in the process improving employment quality. 

On the global front: The US markets ended in green on Friday after Labor Department said non-farm payroll employment rose by 50,000 jobs in December after climbing by a downwardly revised 56,000 jobs in November. Asian markets were trading in green on Monday, tracking positive cues from Wall Street on Friday overnight.

Back home, Indian equity benchmarks buckled under selling pressure for the fifth straight session on Friday, falling more than half percent, as investors turned cautious due to growing concerns over potential US tariff hikes amid lingering geopolitical worries. Persistent foreign fund outflows and caution ahead of key December-quarter results kept investors wary. Finally, the BSE Sensex fell 604.72 points or 0.72% to 83,576.24 and the CNX Nifty was down by 193.55 points or 0.75% to 25,683.30.

Some of the important factors in trade:

Securitisation volumes grow 5% to Rs 1.87 lakh crore in nine months of FY26: A report released by rating agency Crisil ratings has showed that the first nine months of financial year 2025-26 (9MFY26) saw a continued steady momentum in securitisation volumes aided by sustained originations by non-banking financial companies (NBFCs). 

Indian economy likely to grow at 7.5% in 2025-26 with upward bias: A research report from State Bank of India’s (SBI’s) Economic Research Department has estimated that Indian economy likely to grow at 7.5% in 2025-26 with upward bias. This projection is marginally higher from NSO’ estimate.

Textile stocks in watch: In order to create a robust operational framework to strengthen the textile data systems, the Union Textile Ministry has signed Memorandum of Understandings (MoUs) with 15 states, marking a transformative step toward evidence-based policymaking. 

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