Markets likely to make negative start amid mixed global cues

Indian equity markets are likely to make negative start on Thursday amid mixed global cues and ahead of the tabling of the Economic Survey 2025-2026 in Parliament. Besides, investors are likely to remain on side-line ahead of Union Budget due on February 01, 2026. Meanwhile, traders will also be looking for progress in India-US bilateral trade deal. 

Some of the key factors to be watched:

India industrial output surges to 7.8% in December: According to government data, India's industrial production growth accelerated to over a two-year high of 7.8 per cent in December 2025, driven by strong performances in mining, manufacturing and electricity.

India-Chile FTA nears completion: The negotiations between India and Chile, a South American nation, for a free trade agreement (FTA) are close to completion.

India, US trade deal at very advanced stage: India and the US have made very significant progress in their negotiations for a trade deal, with New Delhi maintaining steady momentum in talks with Washington for a positive outcome even during the final stages of concluding its free trade pact with the European Union.

India, EU FTA includes provisions to safeguard exporters market access from future barriers: The report said that the India-EU trade pact includes two special provisions under which, if new regulations or rules are introduced in the future that could act as a trade barrier or undermine the benefits of the deal for exporters, corrective measures can be taken by the affected nation to address such impediments. 

Fertiliser sector’s stocks will be in focus: Provisional data released by the Fertiliser Association of India (FAI) said urea sales in the country increased 3.8 per cent to 31.16 million tonnes during April-December 2025 on account of higher imports, even as domestic production declined marginally.

On the global front: US markets ended mostly higher on Wednesday after the Federal Reserve kept interest rates unchanged. Asian markets are trading mostly in red on Thursday  as traders remain concerned amid the looming threat of war in the Middle East as Iran rejected any nuclear talks under the threat, even as a massive U.S. armada nears the region.

Back home, extending their winning streak for the second consecutive session, Indian equity benchmarks ended higher with gains of over half percent on Wednesday on renewed optimism on the external trade front following the successful conclusion of the Free Trade Agreement between India and the European Union. Finally, the BSE Sensex rose 487.20 points or 0.60% to 82,344.68 and the CNX Nifty was up by 167.35 points or 0.66% to 25,342.75.   

Some of the important factors in trade:

India-EU FTA credit positive for India: Moody's Ratings said the India-EU free trade pact will be credit positive for India as lower tariffs and better market access will help attract foreign investment, boost manufacturing and boost export competitiveness of the labour intensive sector. 

Budget should focus on longer-term vision to make Indian economy more resilient: Former RBI Governor Raghuram Rajan has suggested that the Union Budget should focus on a longer-term vision to make the Indian economy more resilient and independent, while accelerating growth, as the world is experiencing an ‘extremely dangerous time.

FTA between India, EU likely to come in force within 2026 calendar year: After the announcement of the conclusion of negotiations for the historic trade pact, Commerce Minister Piyush Goyal has said that the free trade agreement (FTA) between India and the EU is likely to come in force within the 2026 calendar year.