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Indian equity benchmarks are likely to get flat-to-positive start as market participants await Donald Trump’s inauguration as the 47th U.S. president. However, some volatility may come with stock-specific action as the third quarter of the corporate earnings season is in full swing. Investors will closely track the December quarterly results and management commentary.

Some of the key factors to be watched:

IMF retains India's GDP growth forecast at 6.5% for FY26, FY27: The International Monetary Fund (IMF) retained India's growth forecast at 6.5 per cent for fiscal 2026 and fiscal 2027.

Economic growth poised to rebound as demand regains strength: The latest RBI Bulletin said India's economic growth is poised to rebound as domestic demand regains strength, though the stickiness in food inflation warrants careful monitoring. 

Net FDI inflow slowed to $0.5 billion in April-November: The net foreign direct investment (FDI) in India -- inflows minus outflows -- dropped to $ 0.5 billion during April-November 2024 from $8.5 billion in the same period in 2023, reflecting the rise in repatriation and overseas investments by Indian firms.

India's forex reserves fall $8.7 billion to $626 billion, hit 10-month low: the Reserve Bank of India (RBI) data showed India’s foreign exchange reserves fell for the sixth straight week to hit $625.9 billion - a 10-month low - for the week ended January 10.

Auto stocks will be in focus: Union Minister Nitin Gadkari said India's automobile industry will be number one in the world in the next five years, and highlighted that the industry has created 45 million jobs till now, the highest in the country.

On the global front, the US markets ended higher on Friday on optimism over the health of the economy and path of interest rates as investors braced for a slew of policy changes under the incoming Trump administration. Asian markets are trading mostly in green on Monday tracking gains on Friday in US peers.

Back home, Indian equity benchmarks remained under pressure throughout the trading session and ended with losses of nearly half percent on Friday dragged by selling pressure in Infosys, Axis Bank and Kotak Mahindra Bank. Finally, the BSE Sensex fell 423.49 points or 0.55% to 76,619.33, and the CNX Nifty was down by 108.60 points or 0.47% to 23,203.20.

Some of the important factors for the markets:

Weaker rupee to hike India's Import Bill: Economic think tank GTRI said the weaker rupee will push the country's import bill due to higher payments for crude oil, coal, vegetable oil, gold, diamonds, electronics, machinery, plastics, and chemicals. 

India's economy growth cut to 6.4%: Industry body FICCI lowered India's growth projection for the current financial year to 6.4 per cent from 7 per cent estimated earlier, citing global uncertainties and domestic slowdown. 

Massive outflow of foreign funds: Foreign Institutional Investors (FIIs) offloaded equities worth Rs 4,341.95 crore on Thursday, according to exchange data.

Rising US bond yields continued to create uncertainty amongst local investors: US Treasury markets are surging at the long-end, with 10-Year yields nearing 5%, a level not seen since October 2023.

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