Benchmarks to make flat to positive start on Tuesday

After a major sell-off the previous day, Indian equity markets are likely to make a flat to positive start despite concerns over escalating global tariffs. However, persistent outflows from Foreign Institutional Investors (FIIs) are likely to hit markets sentiments. Investors likely to remain worried ahead of the upcoming RBI policy decision.

Some of the key factors to be watched:

India, Portugal agreed to strengthen cooperation in UN: India and Portugal agreed to strengthen cooperation in the United Nations (UN) and other multilateral forums.

India’s tariffs on US are moderate: Commerce Minister Piyush Goyal said that India’s applied tariffs on the U.S. average just 7-8%, calling them moderate and necessary to guard against unfair trade practices.

Govt hike excise duty on petrol, diesel by Rs 2 per litre: The government hiked excise duty on petrol and diesel by Rs 2 per litre each but there will be no change in retail prices as the increase will be adjusted against the price cut that was warranted because of falling international oil prices.

Mudra Yojana sanctions Rs 32.6 lakh crore: The Pradhan Mantri Mudra Yojana (PMMY) has sanctioned over 52 crore loans worth Rs 32.61 lakh crore, as the scheme marks 10 years since its launch on April 8, 2015. It has fuelled a nationwide entrepreneurial revolution, with a State Bank of India (SBI) report highlighting a significant rise in credit flow to MSMEs driven by the scheme’s impact.

Electronics and IT sector manufactures will be in focus: Electronics and IT Secretary S Krishnan said that electronics and IT sector manufacturers are not 'overly' concerned about the recent hikes in import duty by India's largest trading partner the US. However, the impact will depend on how the tariff situation plays out ahead.

On the global front: The US markets ended mostly in red on Monday, amid ongoing concerns about the impact of President Donald Trump's new tariffs and retaliatory moves by U.S. trade partners. Asian markets are trading mixed on Tuesday amid signs of rising tensions between the U.S. and China. 

Back home, Indian equity benchmarks witnessed a heavy sell-off on Monday, marking the third straight session of losses, as investor sentiment took a major hit amid rising fears of a global recession and a full-blown trade war triggered by Donald Trump’s reciprocal tariffs. Finally, the BSE Sensex fell 2226.79 points or 2.95% to 73,137.90, and the CNX Nifty was down by 742.85 points or 3.24% to 22,161.60.          

Some of the important factors in trade:

RBI MPC Meeting: Market participants remained on sidelines as the Reserve Bank of India's monetary policy committee began its three-day deliberations on key interest rates. The decision of the six-member rate-setting panel will be announced on Wednesday. 

India's exports to US may drop by $5.76 billion due to tariffs: GTRI said India's merchandise exports to the US from sectors such as marine items, gold, electrical, and electronics are expected to decline by $5.76 billion this year due to increased American duties. 

India should expand PLI scheme as Trump announces reciprocal tariffs: SBI in its latest report has said that India should strengthen its Production-Linked Incentive (PLI) schemes in light of growing global trade competitiveness, especially after U.S. President Donald Trump announced reciprocal tariffs on several countries, including India.