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Indian equity markets are likely to make a negative start on Thursday, tracking weakness in global markets and amid the weekly F&O expiry. Investors are likely to adopt a cautious stance ahead of Q4 earnings and the flash estimates of India’s manufacturing and services PMI for May. However, foreign institutional investors' (FIIs) inflows may provide some support and limit the downside.

Some of the key factors to be watched:

India, US likely to agree on interim trade agreement before July 8: India and the US are likely to agree on an interim trade agreement before July 8 with New Delhi pushing for full exemption from the 26 per cent reciprocal tariff on domestic goods. 

UK says trading with India will be quicker, cheaper, easier: UK government said that it will be quicker, cheaper and easier for British companies to trade with India as a result of the bilateral Free Trade Agreement (FTA) struck earlier this month.

India, EU looking for early harvest trade agreement by July: India and the European Union are accelerating negotiations for a trade pact, aiming for an early harvest agreement by July. This interim deal will address key areas like intellectual property rights, government procurement, and tariffs.

India positioned to become connector country in tech, pharma trades: RBI said that amid global trade realignments and industrial policy shifts, India is increasingly positioned to function as a connector country that can become a key intermediary in sectors such as technology, digital services and pharmaceuticals.

Automotive component sector's stocks will be in focus: Ratings agency Crisil said that domestic automotive component sector is expected to clock 7-9 per cent revenue growth this fiscal, mirroring last fiscal, driven by sustained demand momentum from two-wheelers and passenger vehicles segments especially utility vehicles, which account for nearly half of the overall revenue.

On the global front: The US markets ended in red on Wednesday, amid lingering uncertainty about the outlook for trade and the global economy following the surge seen over the past several weeks. Asian markets are trading mostly in red on Thursday, tracking overnight losses on Wall Street as investor sentiment was weighed down by concerns over the growing US fiscal deficit.

Back home, snapping a three-day losing streak, Indian equity benchmarks settled higher after a roller-coaster session on Wednesday, driven by gains in Capital Goods, Realty and Industrials stocks and a firm trend in Asian peers. Finally, the BSE Sensex rose 410.19 points or 0.51% to 81,596.63 and the CNX Nifty was up by 129.55 points or 0.52% to 24,813.45.                      

Some of the important factors in trade:

EPFO adds 14.58 lakh members in March 2025: The Retirement fund body, Employees' Provident Fund Organisation (EPFO) in its latest ‘Provisional payroll data’ report has showed that 14.58 lakh net members have been added in the month of March 2025, an increase of 1.15% compared to March 2024.

Govt working on amendments to insolvency law: The government is planning to amend the Insolvency and Bankruptcy Code (IBC) to streamline the resolution process. A key change involves Section 31(4), potentially removing the requirement for bidders to secure CCI approval before submitting resolution plans to the Committee of Creditors (CoC). 

Persistent foreign fund outflows: Foreign institutional investors (FIIs) extended their selling streak for the second straight session on Tuesday, offloading equities worth Rs 10,016 crore - their steepest single-day selloff in over two months (Feb 28), according to provisional NSE data.

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