IGI Logo

Indian equity markets are likely to make a cautious start on Thursday, amid mixed global cues. Traders are likely to take cautious approach ahead to the Reserve Bank of India's (RBI) monetary policy decision on June 6, with the central bank widely expected to cut interest rates by 25 basis points for the third consecutive time. However, downside may remain capped amid foreign fund inflows.

Some of the key factors to be watched:

India weighs legal uncertainties around Trump tariffs as trade pact talks start this week: India reportedly weighing legal uncertainties surrounding Trump tariffs as it prepares for the next round of trade talks this week.

India Inc well positioned to handle tariff, geopolitical challenges: Moody's Investors Service and its local arm ICRA Ratings said that Indian enterprises are well positioned to handle the impact of tariffs and geopolitical tensions. They also said that Indian non-financial companies are not directly affected by US import tariffs due to their focus on domestic consumption and low dependence on exports.

India calls for WTO action on non-tariff barriers: Commerce and Industry Minister Piyush Goyal said that India has called for action to curb non-tariff barriers, address trade distortions caused by non-market economies, and restore a strong dispute settlement mechanism at the World Trade Organization (WTO).

Goyal to meet Italian businesses, leaders to discuss trade, investments: Commerce and Industry Minister Piyush Goyal has started his two-day visit to Italy where he will meet leaders and businesses to discuss ways to boost trade and investments.

India Australia witnessed 'enormous deepening and diversification' of cooperation: External Affairs Minister S Jaishankar has said India and Australia have witnessed an 'enormous deepening and diversification' of bilateral cooperation in the last five years, and reaffirmed commitment to look at areas such as critical minerals, cyber, technology, and space as further domains of collaboration.

On the global front: The U.S. markets ended mostly in green on Wednesday, following the release of some weaker than expected U.S. economic data. Asian markets are trading mostly in green on Thursday, amid optimism about the outlook for interest rates after the release of some weaker than expected U.S. economic data, which raised concerns about the strength of the economy.

Back home, Indian equity benchmarks ended higher on Wednesday after three days of decline, supported by favourable global cues such as strong US job data and signs of easing US-China trade tensions. Buying in blue-chips Eternal, Bharti Airtel and Tech Mahindra also added optimism to markets recovery.  Finally, the BSE Sensex rose 260.74 points or 0.32% to 80,998.25 and the CNX Nifty was up by 77.70 points or 0.32% to 24,620.20.

Some of the important factors in trade:

Domestic economic conditions will continue to be supportive for growth: Moody's Ratings in its report on the banking sector has said India's domestic economic conditions will continue to be supportive for growth, which will help banks preserve their asset quality and maintain system wide nonperforming loan (NPL) ratio 2-3 per cent in over next 12 months. 

RBI MPC meeting starts: The Reserve Bank's rate-setting panel started its three-day brainstorming on monetary policy as expectations are high of a 25 bps or even a jumbo 50 bps rate cut to fuel economic growth amid uncertainties created by Trump's tariff moves. The decision of the Monetary Policy Committee (MPC) will be announced on Friday.

India services growth steady in May 2025: A monthly report said the Indian services growth broadly steadied in May and was underpinned by healthy demand conditions, new client wins and greater staffing capacity. The seasonally adjusted HSBC India Services PMI Business Activity Index was at 58.8 in May, marginally up from April's 58.7 and signalled another sharp rate of expansion.

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