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Indian equity markets are likely to make cautious start on Thursday, tracking negative cues from Wall Street overnight after the US Federal Reserve delivered a hawkish pause. However, some support may come as foreign institutional investors (FIIs) turned net buyers, purchasing equities worth Rs 101.59 crore on Wednesday.

Some of the key factors to be watched:

India-EU free trade deal to be inked by year-end: The report said that India and the European Union will sign the ambitious free trade agreement by the end of this year. On the sidelines of the G7 summit, the two sides resolved to step up security and defence cooperation.

RBI infuses Rs 72,300 crore transient liquidity into banking system via VRR auctions: The Reserve Bank of India (RBI) has infused Rs 72,300 crore transient liquidity through two Variable Rate Repo (VRR) auction into the banking system after surplus liquidity narrowed following advance tax payments.

India-UK trade pact to come into force from July 15: The report said that India and the UK have announced that the free trade agreement will come into force on July 15, a move which is expected to help double two-way commerce to $100 billion by 2030.

RBI temporarily withdraws interest ceiling on fresh FCNR (B) deposits: The Reserve Bank has temporarily withdrew interest rate ceiling on fresh Foreign Currency Non-Resident (Bank) deposits of 3-5 years' maturity till September 30, a move aimed at attracting foreign capital.

Domestic tractor wholesales likely to grow at 1-4% in FY27: Ratings agency ICRA said that Domestic tractor wholesale volumes are expected to record modest growth this fiscal year at 1-4 per cent and warned that a deficient precipitation is likely to have adverse implications on agricultural output and, consequently, tractor sales. 

Global front: The US markets ended mostly in red on Wednesday, after Federal Reserve officials unanimously voted to hold interest rates at their June FOMC meeting, while also forecasting at least one possible rate hike ahead. Asian markets are trading mostly in green on Thursday, despite the broadly negative cues from Wall Street overnight. 

Back home, Indian equity benchmarks settled higher on Wednesday, extending their winning streak to a fourth straight session, ahead of the U.S. Federal Reserve’s policy decision. Markets traded higher on value buying in index heavyweights and ended firmly in positive territory despite some intraday profit-booking. Sentiments were supported by lower crude oil prices, with Brent hovering near $79 per barrel, and a stronger rupee driven by increased dollar selling by exporters and banks. Finally, the BSE Sensex rose 347.14 points or 0.45% to 77,155.62 and the CNX Nifty was up by 96.55 points or 0.40% to 24,085.70.

Some of the important factors in trade:

India, Canada aim to finalise free trade agreement by end of 2026: Traders took encouragement as India and Canada have agreed to conclude negotiations for a free trade agreement by the year-end as Prime Minister Narendra Modi held wide-ranging talks with his Canadian counterpart Mark Carney on boosting ties in areas of defence, trade and energy.

Sales of listed private manufacturing companies rise by 14.5% in Q4FY26: Some support came as Reserve Bank of India (RBI) data showed that sales of over 1,800 listed private manufacturing companies expanded by 14.5 per cent in the fourth quarter of 2025-26, mainly driven by automobiles, electrical machinery and non-ferrous metals industries.

India, Sri Lanka discuss ways to enhance trade settlement in local currencies: Market participants took note of report that India and Sri Lanka have discussed ways to enhance trade settlement in local currencies to reduce transaction costs and insulate the bilateral trade from dollar volatility. 

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