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Indian equity markets are likely to make cautious start on Friday as investors may book some profit after the recent rally amid encouraging progress in India-U.S. trade discussions and US Federal Reserve's 25 basis points rate cut. However, traders may took note of net buying from foreign institutional investors on Thursday.

Some of the key factors to be watched:

Net direct tax revenue jumps 9%: Government data showed that net direct tax collection grew 9.18 per cent so far this fiscal to over Rs 10.82 lakh crore due to higher advance tax mop-up from corporates and slower refunds.

India, UAE target to double non-oil, non-precious metal trade to $100 billion in next 3-4 years: India and the UAE have set a target to double bilateral trade in non-oil and non-precious metal to $100 billion over the next 3-4 years.

Gadkari asks global investors to explore opportunities in India: Union Minister Nitin Gadkari has urged global investors to invest in India, saying the country offers not only a huge skilled workforce but also a government with a pro-investment approach.

Fresh investment cycle vital for economy at this stage, India Inc should step-up bets: Financial Services Secretary M Nagaraju said a fresh investment cycle is vital for the economy at this stage, and urged India Inc to step up their investments.

Pharma stocks will be in focus: Rating firm ICRA has said that revenue of leading domestic pharmaceutical companies is set to expand by 7-9 per cent in the current fiscal even as global headwinds and regulatory uncertainties cast a shadow over its largest export market.

On the global front: The US markets ended in green on Thursday, after Labor Department released a report showing initial jobless claims pulled back by more than expected in the week ended September 13. Asian markets are trading mixed on Friday ahead of the Bank of Japan's policy decision and a phone call between U.S. President Donald Trump and his Chinese counterpart Xi Jinping to determine the fate of TikTok and the future of U.S.-China relations.

Back home, Indian equity benchmarks closed higher for the third consecutive day and ended with decent gains on Thursday, after the US Federal Reserve cut its key interest rate by 25 basis points and signalled the possibility of two additional rate reductions this year. Sentiment was also buoyed by recent goods and services tax reforms and progress in trade talks between India and the US. Finally, the BSE Sensex rose 320.25 points or 0.39% to 83,013.96 and the CNX Nifty was up by 93.35 points or 0.37% to 25,423.60. 

Some of the important factors in trade:

India’s CAD to stay under 1% of GDP despite tariff: The rating agency Crisil has indicated that India’s current account deficit (CAD) is likely to remain under control at 1% of gross domestic product (GDP) in FY26, despite of the challenges faced by the economy from higher tariffs and global geopolitical headwinds.  

Private capex jump unlikely in FY26: S&P Global in its latest report said while a jump in capital expenditure is unlikely this fiscal year, the prospects for the economic growth catalyst are much better over a medium-to-long term. Companies are likely to invest upward of $800 billion over the next five years. 

GST reforms to inject Rs 2 lakh crore into economy: Union Finance Minister Nirmala Sitharaman has said that the next generation GST reforms will infuse Rs 2 lakh crore into the economy, which will leave people with more cash in hand that otherwise would have gone as taxes.

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