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Indian equity markets are likely to make a negative start on Wednesday, amid rising geopolitical tensions and ahead of the weekly F&O expiry. However, some respite may come from positive comment by US President Donald Trump regarding progress in negotiating a trade deal with India. Additionally, continued FII inflows may also help boost markets sentiment.

Some of the key factors to be watched:

Indian trade deal talks moving well: US Treasury Secretary Scott Bessent said that the US is very close on a trade deal with India, noting that it is much easier to negotiate with India because of the high tariffs and talks with the country are moving well.

Piyush Goyal explores avenues for greater collaboration with UK: Commerce and Industry Minister Piyush Goyal focused on bilateral trade and investment ties during his interaction with a range of senior business leaders to explore the potential for greater collaborations with the UK.

Reciprocal tariffs will exacerbate stress for MSMEs: India Ratings and Research (Ind-Ra) said that reciprocal tariffs will exacerbate stress for medium, small and micro enterprises (MSMEs) but mid-sized corporates have a greater cushion against unanticipated financial shocks.

Private sector capex likely to dip 25% in FY26: A government survey projected that private sector capital expenditure (capex) is expected to decline by around 25% to Rs 4.88 lakh crore in FY26, down from Rs 6.56 lakh crore in FY25. 

US again puts India on priority watch list for alleged IP rights' violations: The US Trade Representative (USTR) has placed India once again on its Priority Watch List, stating that New Delhi remains one of the world's most challenging major economies for the protection and enforcement of intellectual property rights (IPRs).

On the global front: The US markets ended in green on Tuesday amid positive developments on the trade front, with Commerce Secretary Howard Lutnick said that the Trump administration had reached its first trade deal.  Asian markets are trading mixed on Wednesday after China's manufacturing activity declined more than expected, slipping into contractionary territory in April.

Back home, Indian equity benchmarks ended little changed with a positive bias in a volatile trade on Tuesday as investors turned cautious amid concerns over geopolitical tensions. Finally, the BSE Sensex rose 70.01 points or 0.09% to 80,288.38, and the CNX Nifty was up by 7.45 points or 0.03% to 24,335.95.                     

Some of the important factors in trade:

Persistent foreign fund inflows: Foreign investors extended their buying streak to a ninth straight session on Monday, purchasing Indian equities worth Rs 2,474 crore. With the latest inflow, FIIs have now turned net buyers for April, reversing earlier heavy selling of nearly Rs 35,000 crore.  

RBI to inject Rs 1.25 lakh crore liquidity via OMO purchase in May: The RBI is all set to inject more liquidity into the banking system through the purchase of Government bonds for an aggregate amount of Rs 1.25 lakh crore in May. The decision was taken after a review of current and evolving liquidity conditions.

Climate change may lead to increased probability of defaults: RBI deputy governor M Rajeshwar Rao said that climate change would lead to additional operational costs for borrowers with an increased possibility of a loss of their assets, leading to an increased probability of default by borrowers.

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