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Indian equity markets are likely to make a cautious start on Thursday, amid continued cross-border shelling by Pakistani troops along the Line of Control (LoC) in Jammu & Kashmir. Besides, there will be some volatility due to the weekly F&O expiry. However, overnight fall in crude oil prices likely to support domestic markets later in the day.

Some of the key factors to be watched:

Piyush Goyal to meet exporters on India-UK trade pact: Commerce and Industry Minister Piyush Goyal is scheduled to meet with Export Promotion Councils (EPCs) on May 8 to discuss the free trade agreement with the UK. The landmark deal aims to eliminate taxes on key Indian exports like leather and clothing, while reducing tariffs on UK imports such as whisky and cars.

India opens govt procurement sector for UK firms: India expands trade opportunities for British firms. The move follows a free trade agreement. British companies can now bid on Indian government contracts. This access applies to central-level entities. State and local government contracts are excluded. 

India's apparel exports to the UK are set to double in three years: Apparel Export Promotion Council (AEPC) Chairman Sudhir Sekhri said the free trade agreement (FTA) with the UK will help to double India's ready-made garment exports to Britain in the next three years. This deal has came as a boon, removing immediately tariff disadvantage of 9.6 per cent and making the country competitive in the UK market.

Telecom stocks will be in limelight: Telecom Regulatory Authority of India (TRAI) reported that India's total wireless subscriber base, including mobile and 5G fixed wireless access (FWA), rose to 1,163.76 million in March current year from 1,160.33 million in February, marking a monthly growth of 0.28 per cent.

Aluminium stocks will be in focus: Crisil Ratings reported that Indian primary aluminium manufacturers are projected to remain in a healthy profitable state for this fiscal year, countering global trade headwinds, including the recent hike in US tariffs on aluminium imports.

On the global front: The US markets ended in green on Wednesday following news that Treasury Secretary Scott Bessent will meet with China’s lead representative on economic matters during a trip to Switzerland on Thursday. Asian markets are trading mostly in green on Thursday after chipmaker Advanced Micro Devices reported strong financial results for the first quarter of 2025 and China reduced its policy rate to boost the economy. 

Back home, Indian equity benchmarks remained volatile but managed to close slightly in green on Wednesday as sentiment was underpinned by strong corporate earnings and optimism following the India-UK Free Trade Agreement. Finally, the BSE Sensex rose 105.71 points or 0.13% to 80,746.78, and the CNX Nifty was up by 34.80 points or 0.14% to 24,414.40.                     

Some of the important factors in trade:

Sustained FII buying: Provisional data from the National Stock Exchange showed that foreign portfolio investors stayed net buyers of Indian equities for the 14th straight session on Tuesday, as they bought stocks worth Rs 3,794.52 crore. 

Govt’s policies tailored in way to support manufacturing and service sector growth: Finance Minister Nirmala Sitharaman has said that government's policies have been tailored in a way to support manufacturing and the service sector growth. She said about 60 per cent of India's GDP is contributed by the services sector. 

India to retaliate if EU imposes carbon tax: Commerce and Industry Minister Piyush Goyal has said that India would impose retaliatory duties if the European Union (EU) goes ahead with its plan to levy a carbon tax on Indian products. Under the EU’s Carbon Border Adjustment Mechanism (CBAM), Indian exports of steel, aluminum, and cement to the EU could face tariffs of 20-35 per cent. 

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