Markets to make gap-down opening as trade worries persist

Indian equity benchmarks are likely to make gap-down opening on Monday, following Friday’s sharp decline on Wall Street and ongoing concerns over global trade tensions and tariff-related uncertainties. Additionally, continued selling by Foreign Institutional Investors (FIIs) is likely to further dampen markets sentiments. Investors are likely to remain cautious ahead of the Reserve Bank of India’s upcoming monetary policy decision.

Some of the key factors to be watched:

India’s forex reserves rise to $665.4 billion: Reserve Bank of India said that India's foreign exchange reserves rose from $6.596 billion to $665.396 billion in the week that ended on March 28, extending gains for the fourth straight week.

India's exports projected to cross $800 billion in 2024-25: India's goods and services exports are estimated to surpass $800 billion in 2024-25, despite merchandise shipments remaining stagnant. Positive growth in merchandise exports is expected in 2025-26.

India, EU aim to finalise FTA within this year: The Ministry of External Affairs said India is hopeful that Free Trade Agreement (FTA) with the European Union will be finalised soon. During a recent visit, Indian Prime Minister Narendra Modi and European Commission President Ursula von der Leyen directed their teams to finalise the FTA within this year.

CareEdge warns of dumping risk in India from US tariffs: CareEdge Ratings warns that high reciprocal U.S. tariffs on competing nations could lead to increased dumping of goods into India, potentially harming some sectors.

IT industry stocks will be in the limelight: A private report indicated that India’s information technology sector is expected to report subdued growth for the fourth quarter of FY25 (January-March period).

On the global front: The US markets ended in red on Friday, amid ongoing concerns about a global trade war after China announced retaliatory tariffs on U.S. goods in reaction to President Donald Trump's new levies. Asian markets are trading in red on Monday as investor sentiment remained fragile as U.S. President Donald Trump's reciprocal tariffs fueled concerns about inflation and growth.

Back home, Indian equity benchmarks saw a sharp sell-off on Friday, tracking weak global markets amid growing global trade war fears. Besides, a sharp correction in crude prices and a heavy sell-off in market heavyweights Tata Steel, Tata Motors and Larsen & Toubro added to the gloom. Finally, the BSE Sensex fell 930.67 points or 1.22% to 75,364.69, and the CNX Nifty was down by 345.65 points or 1.49% to 22,904.45.      

Some of the important factors in trade:

FIIs selling continues: Exchange data showed foreign institutional investors (FIIs) extended their selling streak for the fourth consecutive session on April 3, offloading equities worth Rs 2,806 crore.

India's services sector activity eases slightly in March: India's services sector activity eased slightly in March, weighed down by a marginal slowdown in sales amid softer demand conditions and easing inflationary pressures. The seasonally adjusted HSBC India Services PMI Business Activity Index fell from February's reading of 59.0 to 58.5 in March, but remained above its long-run average of 54.2.

US to impose 30% Tariff on Indian Agri, Plastics, Textiles: The Global Trade Research Initiative (GTRI) said sectors including agriculture, meat, processed food, plastics, textiles and clothing will face over 30 per cent import duties in the US market from April 9, 2025.