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Indian equity markets are likely to make a gap-down opening on Friday, following weak global cues after Israel reportedly launched airstrikes in Iran. Additionally, sentiment may be further weighed down by outflows from foreign institutional investors (FIIs). However, some support may come later in the day amid better-than-expected inflation data for May.

Some of the key factors to be watched:

Retail inflation eases to six-year low of 2.82% in May: India's retail inflation, as measured by the Consumer Price Index (CPI), eased to a six-year low of 2.82 per cent in the month of May 2025 mainly due to a slower increase in food prices.

China on lifting export curbs on rare earth metals to India: China has hinted at holding talks with India over its restrictions on export of rare earth materials, saying it is willing to enhance dialogue and cooperation with relevant countries to keep industrial supply chains stable.

India opens to mutually beneficial arrangements on QCOs with trusted partners: Commerce and Industry Minister Piyush Goyal said that India is open to mutually beneficial arrangements on implementing norms related quality standards with its trusted trading partners

RBI asks banks to give due notices to customers for periodic KYC update: Reserve Bank of India (RBI) has asked banks and other regulated entities to give due notices to their customers for periodic updation of Know Your Customer (KYC) with a view to enhance consumer protection as well as service. 

Renewable energy’s stocks will be in focus: Union Minister Pralhad Joshi said that India's total renewable energy capacity grew 17.13 per cent year-on-year to 226.74 gigawatts (GW) in May.

On the global front: The U.S. markets ended in green on Thursday, as traders digested the latest U.S. inflation data, with a report from the Labor Department showing producer prices crept up by less than expected in the month of May. Asian markets are trading in red on Friday, as investor sentiment turned cautious following reports of an Israeli military strike on Iran.

Back home, Indian equity markets ended sharply lower on Thursday in tandem with weak global market trends amid growing tensions in the Middle East. Fresh foreign fund outflows also dented investors' sentiment. The markets started on a positive note, but profit-taking in heavyweight stocks across sectors gradually dragged the indices lower, with the decline accelerating in the second half. Finally, the BSE Sensex fell 823.16 points or 1.00% to 81,691.98 and the CNX Nifty was down by 253.20 points or 1.01% to 24,888.20.

Some of the important factors in trade:

Proposed national e-commerce, retail trade policies under discussions: Commerce and Industry Minister Piyush Goyal has said that the proposed national e-commerce and retail trade policies are under discussions as both are linked to each other.

Year-end timeline set for completion of India-EU FTA seems ‘feasible’: Expressing an optimism over India-EU free trade agreement, External Affairs Minister S Jaishankar has said that India places a high priority to its relations with the European Union, the centrepiece of which is the Free Trade Agreement negotiations that are making very good progress.

Swedish Minister says India, EU FTA should resolve tariffs, non-tariff barriers: Swedish Minister for International Development Cooperation and Foreign Trade Benjamin Dousa said that the EU and India should work towards a free trade agreement that addresses tariff and non-tariff barriers as both regions are currently a bit over-regulated.

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