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Indian equity benchmarks are likely to make a cautious start with negative bias amid rising concerns of looming global trade war after US president Trump imposed discounted reciprocal tariffs on all their trading partner. However, some optimism may come later in the day with report that India’s position being comparatively better than its neighboring competitors amid changing global trade order. Besides, it is widely accepted that the Reserve Bank of India will slash the interest rate by 25bps in upcoming MPC meeting schedule from April 7 to April 9.

Some of the key factors to be watched:

Announcements by US to have substantial implications for global trade: World Trade Organization’s Director-General has stated that the measures announced by the US will have substantial implications for world trade and economic growth prospects, and could lead to an overall contraction of around 1 percent in global merchandise trade volume this year.

Shift focus from grocery delivery to high-tech sectors: Commerce and Industry Minister Piyush Goyal has asked the Indian startup community to shift their focus from grocery delivery and ice cream making to high tech sector like semiconductor, machine learning, robotics, and artificial intelligence.

Financing innovation essential for India's Viksit Bharat vision: According to Associated Chambers of Commerce and Industry of India’s (Assocham), India's vision for Viksit Bharat fundamentally relies on global competitiveness and innovation, which requires significantly more financing for startups to play a critical role across sectors like agriculture, healthcare, and financial inclusion.

US tariffs not to have any material impact on India's passenger vehicle exports: ICRA indicated that the US tariff imposition does not have any material impact on the automotive original equipment makers since passenger vehicle (PV) exports from India to the USA represent less than 1 per cent of the overall PV exports.

Aviation industry stocks will be in focus: Parliament approved the Protection of Interests in Aircraft Objects Bill, 2025 that will help reduce risks and costs for aircraft leasing by airlines in India, which is one of the world's fastest growing civil aviation markets.

On the global front: The US markets ended sharply lower on Thursday amid concerns about a global trade war following US President Donald Trump's tariff announcement. Asian markets are trading lower on Friday following the broadly negative cues from Wall Street overnight.

Back home, Indian equity benchmarks settled lower on Thursday due to selling in IT and TECK shares and a global sell-off as US President Donald Trump unveiled reciprocal tariffs on 60 countries, including India. Finally, the BSE Sensex rose 592.93 points or 0.78% to 76,617.44, and the CNX Nifty was up by 166.65 points or 0.72% to 23,332.35.

Some of the important factors in trade: 

FPIs stay net sellers for third session in row: Provisional data from the National Stock Exchange showed foreign portfolio investors (FPIs) stayed net sellers on Wednesday for the third straight session as they offloaded equities worth Rs 1,538.88 crore. On Tuesday, the FPIs net sold equities worth Rs 5,901.63 crore. 

India's exports to Australia rise by 4.4% during April-February 2024-25: Commerce ministry said that India's exports to Australia have risen by 4.4 per cent year-on-year during April-February 2024-25 due to the free trade agreement implemented by both the countries in 2022.

Pharma, semiconductors, energy products exempt from Trump's tariffs on India: The GTRI has said that essential and strategic items such as pharmaceuticals, semiconductors, copper, and energy products like oil, gas, coal and LNG are exempted from the 27 per cent import duty announced by the US. Overall, it said that the USA's protectionist tariff regime could act as a catalyst for India to gain from global supply chain realignments.

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