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Indian equity markets are likely to make negative start on Tuesday, tracking weak global cues. Traders are likely to remain cautious due to continued foreign investor selling, as Foreign institutional investors were net sellers of equities worth Rs 1,468 crore on Monday.

Some of the key factors to be watched:

India's exports to US up 22.6% to $7 billion in November: After recording negative growth for two consecutive months, the commerce ministry data showed that India's merchandise exports to the US rose 22.61 per cent to $6.98 billion in November despite steep 50 per cent tariffs on domestic goods.

Engineering exports rise 23.7% in November to $11 billion: Industry body EEPC India said that engineering goods exports rebounded in November despite tariff headwinds, rising 23.7 per cent year-on-year to around $11.01 billion after a steep fall in October.

India, EU trying to narrow differences on trade pact: Commerce Secretary Rajesh Agrawal has said that the negotiations between India and the 27-nation bloc EU have entered the most difficult stage, and both sides are engaged to bridge the differences and close the talks soon.

India proposes preferential trade agreement with Mexico to deal with high tariffs: The report said that India has proposed a preferential trade agreement (PTA) with Mexico to help domestic exporters deal with the steep tariffs announced by the South American country.

Lok Sabha passes Rs 41,455 crore Supplementary Grants: The Lok Sabha has passed the first batch of Supplementary Demands for Grants, authorising the government for Rs 41,455 crore additional spending in the current fiscal, including over Rs 18,000 crore expenditure towards fertiliser subsidy.

On the global front: The US markets ended lower on Monday, as investors braced for key economic data releases, including delayed jobs and inflation readings for clarity on the outlook for interest rates. Asian markets are trading in red on Tuesday, following the broadly negative cues from Wall Street overnight.

Back home, Indian equity benchmarks erased initial losses and ended flat with negative bias on Monday in tandem with a weak trend in global markets and persistent foreign fund outflows. Foreign institutional investors (FIIs) offloaded equities worth Rs 1,114.22 crore on Friday, according to exchange data. Also, uncertainty over an India-US trade deal weighed on investors' sentiment. Finally, the BSE Sensex fell 54.30 points or 0.06% to 85,213.36 and the CNX Nifty was down by 19.65 points or 0.08% to 26,027.30. 

Some of the important factors in trade:

India WPI inflation narrows in November: The government data showed wholesale price inflation (WPI) came in at (-) 0.32 per cent in November, driven by an uptick in prices of food articles like pulses and vegetables on a month-on-month basis. WPI-based inflation was (-) 1.21 per cent in October and 2.16 per cent in November last year. 

RBI calls external benchmarking for MSME loans: The Reserve Bank of India (RBI) has advised the banks to link loans to MSMEs to an external benchmark. This move aims to improve the transmission of the central bank's monetary policy and support the MSME sector. 

Diamond stocks in focus: The GJEPC data has showed that India's gems and jewellery exports grew 19.64 per cent to $2.5 billion in November compared to the same month last year. Total exports stood at $2.1 billion during the corresponding month of the previous year.

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