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Indian equity markets are likely to make a cautious start on Tuesday, tracking mixed cues from Asian markets amid lingering concerns over potential U.S. tariffs. However, downside may be limited due to ongoing inflows from Foreign Institutional Investors (FIIs). Additionally, the early arrival of the monsoon is likely to lend some support.

Some of the key factors to be watched:

US enjoys $35-40 bn surplus with India: The economic think tank GTRI said that the US, despite reporting a $44.4 billion trade deficit with India, runs a $35 to $40 billion overall surplus when revenues from education, digital services, financial activities, royalties, and arms trade are factored in.

US officials likely to visit India for next round of talks on interim trade pact: A team of US officials is reportedly expected to visit India for trade talks, aiming to finalize an interim agreement before July 9. India seeks full exemption from the 26% reciprocal tariff.

NITI Aayog releases report offering roadmap to uplift Medium Enterprises: NITI Aayog has released a report titled Designing a Policy for Medium Enterprises, offering a comprehensive roadmap for transforming medium enterprises into future growth engines of India's economy.

Goyal to meet exporters on May 27 on proposed centralised exporters portal: Commerce and Industry Minister Piyush Goyal will hold discussions with representatives of export promotion councils (EPCs) here on May 27 on the proposed centralised exporters portal.

Mining and construction equipment sector's stocks will be in focus: Confederation of Indian Industry (CII), in collaboration with Kearney, reported that India is poised to unlock a $45 billion opportunity in mining and construction equipment sector by 2030.

On the global front: The U.S. markets were closed on Monday in observance of Memorial Day. Asian markets are trading mixed on Tuesday, as investors took note of Trump’s decision to delay 50 per cent tariffs on European Union imports.

Back home, Indian equity benchmarks continued their upward momentum for a second consecutive session and ended higher over half percent on Monday due to a host of positive triggers like India emerging as the fourth largest economy in the world and US President Donald Trump delayed 50 per cent EU tariffs to July 9. Finally, the BSE Sensex rose 455.37 points or 0.56% to 82,176.45 and the CNX Nifty was up by 148.00 points or 0.60% to 25,001.15.  

Some of the important factors in trade:

RBI to give record dividend of Rs 2.69 lakh crore to Govt: With an aim to help the exchequer to tide over challenges posed by US tariffs and increased spending on defence due to the conflict with Pakistan, the Reserve Bank of India (RBI) has announced a record Rs 2.69 lakh crore dividend to the government for FY25, 27.4 per cent higher than 2023-24.

India overtakes Japan to become the world's fourth largest economy: NITI Aayog CEO B V R Subrahmanyam said that India has become the fourth largest economy in the world, overtaking Japan. He said overall geopolitical and economic environment is favourable to India.

Inflow of foreign funds: The provisional data from the National Stock Exchange showed foreign portfolio investors turned net buyers of Indian equities on Friday after a day of selling, as they mopped up stocks worth Rs 1,794.59 crore. 

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