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Indian equity markets are likely to make cautions start on Wednesday amid weak global cues. Traders are likely to remain cautious amid a broad selloff in global technology stocks. Additionally, selling by foreign portfolio investors (FPIs) could further dampen markets sentiments.

Some of the key factors to be watched:

India, China unveil raft of measures to fully realise their development potential: India and China has unveiled a series of measures for a stable, cooperative and forward-looking relationship that included jointly maintaining peace along the frontier, reopening border trade, promoting investment flows, and resuming direct flight connectivity at the earliest.

India, US negotiating agreement to liberalise trade in goods, non-sensitive agri products: Minister of State for Commerce and Industry Jitin Prasada said that India and the US are negotiating a multi-sector bilateral trade agreement and as a part of the negotiations, both sides are discussing liberalisation of trade in goods, including non-sensitive agricultural products.

Proposed 2-tier GST structure could lower effective tax rate, boost revenues in long term: S&P Global Ratings Director YeeFarn Phua said that the proposed 2-tier GST structure could lower effective taxation rate and boost fiscal revenues over the longer term.

Indian corporates have low direct exposure to US tariffs: Fitch Ratings said that India-based corporates have low direct exposure to US tariffs, but sectors that are currently unaffected, including pharmaceuticals, could be hit by further US tariff announcements.

US tariff unlikely to impact India's long-term prospects: S&P Global Ratings said that high US tariffs are unlikely to impact India's long-term growth prospects as the government is focused on economic reforms and trying to improve the standard of living of people.

On the global front: The U.S. markets ended mostly in red on Tuesday, ahead of key economic events later in the week, including the release of the minutes of the Federal Reserve's latest monetary policy meeting on Wednesday and the Jackson Hole Economic Symposium that gets underway on Thursday. Asian markets are trading mostly in red on Wednesday, as investors weighed Japan’s latest trade figures and awaits China’s decision on its loan prime rate.

Back home, rising for the fourth consecutive day, Indian equity benchmarks ended around half percent higher on Tuesday following gains in Oil & Gas, Energy and Auto stocks amid prevailing optimism over sweeping GST reforms and easing geopolitical worries. Finally, the BSE Sensex rose 370.64 points or 0.46% to 81,644.39 and the CNX Nifty was up by 103.70 points or 0.42% to 24,980.65.  

Some of the important factors in trade:

Govt reduces debt burden over last five years: Finance Minister Nirmala Sitharaman has said that the government reduced its debt burden over the last five years and the fiscal deficit targets are being aligned to reduce it further in the coming years. She noted that the government has steadily reduced the debt over the years from 61.4 per cent of GDP in 2020-21, after the Covid-19 pandemic, to 56.1 per cent of GDP in the Budget Estimate for 2025-26. 

Commerce & Industry Ministry mulling further FDI regime easing, more tax benefits for startups: The commerce and industry ministry is reportedly working on a 100-day reforms agenda which may include proposals such as further liberalising FDI regime, easing investments from neighbouring countries, and more tax benefits for start-ups.

Telecom stocks in watch: Crisil Ratings in its latest report has said that the operating profit of telecom companies in India is expected to grow 12-14 per cent to about Rs 1.55 lakh crore this fiscal (FY26), driven by more data consumption and rise in average revenue per user (ARPU).

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