Benchmarks likely to make positive start amid strong global cues

Indian equity markets are likely to make a positive start on Monday, supported by strong global cues and optimism around US-China trade talks. Additionally, traders likely to take some support from buying by foreign institutional investors (FIIs). However, gains could be limited due to a rise in Covid-19 cases.

Some of the key factors to be watched:

US team for trade talks in India, aims at expeditious conclusion of pact: A private report said that the proposed trade agreement between India and the US would provide greater market access for goods by reducing tariffs, cutting trade barriers, and improving supply chain integration.

India’s agri sector transformed by 5-fold budget jump over 11 years: Government said that India's agricultural sector has undergone a profound transformation over the past 11 years through various government schemes and increased budgetary allocations, empowering farmers to lead the nation from food security to global food leadership.

RBI Governor says future monetary action will depend on data on growth, inflation: Reserve Bank Governor Sanjay Malhotra said that the future monetary policy actions will be decided by the trajectory of growth and inflation. If the RBI's expectation of 6.5 per cent real GDP growth and inflation cooling to 3.7 per cent in FY26 plays out, there is little space for interest rate cut.

India's forex reserves drop $1.24 billion to $691.49 billion: RBI said that India's forex reserves dropped by $1.24 billion to $691.49 billion for the week ended May 30, the on Friday. The overall reserves had jumped by $6.99 billion to $692.72 billion in the previous reporting week. The forex reserves had touched an all-time high of $704.88 billion in end-September 2024.

Extreme poverty in India down to 5.3% in 2022-23: India's extreme poverty rate declined sharply to 5.3 per cent over a decade from 27.1 per cent in 2011-12 even as the World Bank revised upwards its threshold poverty line to $3 per day.

On the global front: The U.S. markets ended higher on Friday, after US Labor Department said non-farm payroll employment shot up by 139,000 jobs in May after jumping by a downwardly revised 147,000 jobs in April. Asian markets are trading in green on Monday, amid upcoming U.S.-China trade talks in London and U.S. inflation data in focus.

Back home, Indian equity benchmarks continued their strong upward momentum for the third straight session on Friday as investors cheered a 50 basis points repo rate cut by the Reserve Bank of India's Monetary Policy Committee (MPC). Finally, the BSE Sensex rose 746.95 points or 0.92% to 82,188.99 and the CNX Nifty was up by 252.15 points or 1.02% to 25,003.05.

Some of the important factors in trade:

RBI cuts inflation projection to 3.7%: The RBI cut inflation projections for the current fiscal to 3.7 per cent from the earlier estimate of 4 per cent, as it expects core inflation to remain benign with the easing of international commodity prices. The sub-4 per cent average retail inflation projection is the lowest in recent years.

RBI rate cut boosts affordable housing sales: CREDAI President Shekhar G Patel said the RBI’s decision to cut repo rate by 50 basis points will improve consumers' sentiment, immensely benefitting mid-income and affordable housing segments, which have been struggling in the last few years.

Piyush Goyal proposes to develop industrial conclave for Italian businesses in India: With an aim to promote investments, Commerce and Industry Minister Piyush Goyal has proposed to develop an industrial conclave for Italian businesses in India. He said Italian companies can consider setting up manufacturing units and offices in those enclaves.