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Indian equity markets are likely to make cautious start as investors seek more clarity on anticipated trade deal between India and US. Meanwhile, funds outflows by Foreign Institutional Investors (FIIs) may weigh on the trading sentiments. Moreover, traders will react to Q1 earnings from key companies including Wipro, Axis Bank, Jio Financial, CEAT, LTIMindtree, and Tata Communications in the ongoing earning season. 

Some of the key factors to be watched:

India and US trying to iron out issues on proposed trade deal: The Ministry of External Affairs (MEA) has indicated that negotiations between India and the US are underway to iron out pending issues for a trade deal.

India's goods exports likely to face headwinds in fiscal 2026: Ratings firm CRISIL has indicated that India's goods exports are likely to face some headwinds in fiscal 2026, as reciprocal tariffs imposed by the US are seen to aggravate this.

Sebi aims to deepen equity market, flags concerns over derivatives frenzy: SEBI expressed concern over the growing dominance of ultra-short-term derivatives trading, cautioning that such trends could undermine the health of India's capital markets, while contemplating steps to extend the tenure and maturity of these products.

RBI to hold Rs 2 lakh crore 7-day VRRR: The Reserve Bank of India will conduct a seven-day variable rate reversal repo auction for an amount of Rs 2 lakh crore on July 18.

Auto stocks will be in focus: The Ministry of Heavy Industries said the government has initiated the formulation of the Automotive Mission Plan 2047 (AMP 2047), a strategic road map aligned with the Viksit Bharat 2047 vision to establish India as a global automotive leader, focusing on innovation and sustainability.

On the global front: The US markets ended higher on Thursday following the release of a batch of largely upbeat US economic data, including a Commerce Department report showing retail sales rebounded by much more than expected in the month of June. Asian markets are trading mostly in green on Friday tracking gains from Wall Street overnight. 

Back home, Indian equity benchmarks mostly remained under selling pressure throughout the day and ended nearly half a percent lower on Thursday following selling in IT, TECK and Banking shares and investors remained in a wait-and-watch mode ahead of the outcome of the US-India trade talks. Finally, the BSE Sensex fell 375.24 points or 0.45% to 82,259.24 and the CNX Nifty was down by 100.60 points or 0.40% to 25,111.45.

Some of the important factors in trade:

RBI to 'wait and watch’ before further rate cuts: RBI Governor Sanjay Malhotra has said that Reserve Bank will ‘wait and watch’ the evolving situation before deciding on any further rate cut, as he emphasised that both growth and price stability are equally important.

RBI’s commitment to keep sufficient liquidity to facilitate transmission in rate cut in 2025: Fitch Ratings has said the Reserve Bank of India’s (RBI’s) substantial liquidity infusions into the banking system since early 2025 and its commitment to keep sufficient liquidity in the system will facilitate transmission of 100 basis points rate cut in 2025.

Cabinet approves Rs 24,000 crore agricultural scheme: The Cabinet has approved Prime Minister Dhan-Dhaanya Krishi Yojana for a period of six years, covering 100 districts with an annual outlay of Rs 24,000 crore.

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