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Indian equity markets are likely to make a positive start on Wednesday, tracking mixed cues from global markets. Traders are likely to take some support from the sharper-than-expected decline in consumer price inflation, which eased to 3.16% in April. Additionally, investors will keep a close watch on the release of wholesale price inflation data for April, scheduled later in the day. However, some volatility may emerge as the session progresses, driven by continued outflows from foreign institutional investors (FIIs).

Some of the key factors to be watched:

Retail inflation declines to 3.16% in April: India's Retail inflation declined to a nearly 6-year low of 3.16 per cent in April, mainly on account of subdued prices of vegetables, fruits, pulses, and other protein-rich items, and remains within the comfort zone of the Reserve Bank of India.

India reserves right to impose retaliatory duty on US goods: India has only reserved its right under WTO norms to impose retaliatory duties on certain American products over the US' steel and aluminum tariffs and it may choose to resolve the issue through the ongoing bilateral trade agreement (BTA) negotiations between the two countries.

Sitharaman reviews financial inclusion schemes: Finance Minister Nirmala Sitharaman has reviewed the progress of the government's financial inclusion schemes. The schemes which were reviewed include Jan Dhan Yojana, Pradhan Mantri Suraksha Bima Yojana, Pradhan Mantri Jeevan Jyoti Bima Yojana, Atal Pension Yojana, and PM Vishwakarma, among others.

Investors show strong faith in India's economy, PM's policies: Union Minister Ashwini Vaishnaw has said that the investors have continued to exude a high level of confidence in India's economy, the Prime Minister's policy and the country's talent. 

Coal stocks will be in focus: India's coal import in the April-February period of 2024-25 dropped 9.2 per cent to 220.3 million tonnes (MT), resulting in foreign exchange savings of about Rs 53,137.82 crore.

On the global front: The US markets ended mostly in green on Tuesday following the release of a Labor Department report showing consumer prices in the U.S. rose by slightly less than expected in the month of April. Asian markets are trading mixed on Wednesday as US-China trade  tensions ease.

Back home, after witnessing a stellar up-move in the previous session, Indian equity benchmarks slipped into weakness subsequently on Tuesday and settled near day’s low points due to profit-taking in TECK, IT and Utilities shares. Finally, the BSE Sensex fell 1281.68 points or 1.55% to 81,148.22, and the CNX Nifty was down by 346.35 points or 1.39% to 24,578.35.           

Some of the important factors in trade:

US-China deal to roll back high tariffs presents challenges, opportunities for India: A private report said that recent decision by the US and China to suspend their tariff hikes for 90 days presents both challenges and opportunities for India. 

CTI urges business entities to boycott Chinese Turkish goods in national interest: The Chamber of Trade and Industry (CTI) has appealed to over 700 business organisations in the national capital to halt all forms of trade with China and Turkey. China and Turkey have supported rival positions in the Indo-Pak conflict.

Foreign fund inflows: Foreign Institutional Investors (FIIs) bought equities worth Rs 1,246.48 crore on Monday after a day's breather, according to exchange data.  

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