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Indian equity benchmarks are likely to make pessimistic start due to concerns over US tariffs on imports from Canada, Mexico, and China, alongside ongoing geopolitical tensions. Foreign fun outflows likely to weight on domestic sentiments.

Some of the key factors to be watched:

FDI in India drops 5.6% to $10.9 bn in Oct-Dec: Department for Promotion of Industry and Internal Trade (DPIIT) data showed that the foreign direct investment in India dipped by 5.6 per cent year-on-year to $10.9 billion in October-December quarter of this fiscal due to global economic uncertainties.

India-EU free trade talks in focus: India and the European Union (EU) have resolved to conclude a free trade agreement (FTA) by the end of this year.

Banking stocks will be in focus: Fitch Ratings has said Indian banks have performed robustly in the first nine months of the current financial year with the sector's impaired loan ratio close to the trough.

Power stocks will be in limelight: According to the government data, India's power consumption grew marginally to 131.54 billion units (BU) in February, higher than 127.34 BU in the year-ago period.

Stocks of sugar sector will be in focus: Deepak Ballani, Director General of Indian Sugar and Bio-Energy Manufacturers Association (ISMA) said India will easily exhaust its 1 million tonne sugar export quota allowed by the government for the current marketing year.

On the global front: The US markets ended lower amid concerns about the economic impact of President Donald Trump's proposed tariffs. Asian markets are trading mostly lower on Tuesday tracking US shares lower as President Donald Trump’s pledge to impose tariffs on trading partners raised the spectre of a trade war hitting global economic growth.

Back home, Indian equity benchmarks failed to protect their opening gains and ended flat with negative bias in a highly volatile session on Monday as investors remained cautious amid global uncertainties and sustained foreign fund outflows. Finally, the BSE Sensex fell 112.16 points or 0.15% to 73,085.94, and the CNX Nifty was down by 5.40 points or 0.02% to 22,119.30.

Some of the important factors in trade: 

Fiscal deficit till January widens: Traders remained cautious as the central government's fiscal deficit up to January this financial year hit 74.5% of the revised annual target, compared with 63.6% a year before. 

India’s Manufacturing PMI slips to 56.3 in February: Traders were concerned as India's manufacturing activity grew at slow pace in the month of February. According to the survey report, the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) eased to 56.3 in February as against 57.7 in January.

India’s economy grows 6.2% in Q3: Traders overlooked the government data showing that the Indian economy recovered in the December quarter to grow at 6.2 percent after sinking to a seven-quarter low of 5.6 percent in the July-September period.

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