Indian equity markets are likely to make cautious start on Monday, amid ongoing geopolitical uncertainties, with investors awaiting further clarity on the proposed U.S.-Iran trade agreement. Traders are likely to remain on the sidelines ahead of the release of the final HSBC Manufacturing PMI data later in the day.
Some of the key factors to be watched:
RBI likely to keep policy rate unchanged at 5.25%: All eyes will be on the Reserve Bank of India’s monetary policy committee (MPC) meeting to be held from June 3 and outcome will be on June 05. There are expectations that the RBI may leave the key policy rate unchanged at 5.25 per cent and adopt a cautious stance that factors in the possible headwinds to inflation.
India, US chief negotiators to hold four-day trade talks from June 1: The commerce ministry has said that the chief negotiators of the US and India will begin four-day talks here on June 1, 2026, on finalising the details of the interim trade pact, whose framework was agreed upon in February.
India’s economic performance remains resilient despite global uncertainty: The Finance Ministry’s Monthly Economic Review (MER) for May 2026 said that India’s economic performance remained resilient despite global uncertainty arising from the ongoing conflict in West Asia. It noted that the foreign exchange reserves remained at comfortable levels.
India's services exports rise by 12.7% in April: Reserve Bank of India (RBI) said that India's services trade saw an expansion in imports and exports during April. The RBI data showed that exports grew by 12.7 per cent to $37.021 billion in April, registering the highest growth in the calendar year.
Energy prices, current account deficit, balance of payments big priorities right now: Chief economic advisor V Anantha Nageswaran said that managing Macroeconomic fundamentals like the balance of payments and current account deficit has assumed a larger priority for the government right now as the West Asia conflict has triggered a massive global energy shock.
Global front: The US markets ended higher on Friday, amid optimism over a potential U.S.-Iran deal, following reports that the United States and Iran are nearing the signing of a Memorandum of Understanding (MoU). Asian markets are trading mostly in green on Monday, tracking cues from Wall Street overnight.
Back home, Indian equity benchmarks came under heavy selling pressure on Friday, amid reports of a below-normal monsoon season rainfall and geopolitical uncertainty related to the US-Iran ceasefire arrangement. Sustained FII selling also weighted on sentiments. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,042.70 crore on Wednesday, according to exchange data. Finally, the BSE Sensex fell 1092.06 points or 1.44% to 74,775.74 and the CNX Nifty was down by 359.40 points or 1.50% to 23,547.75.
Some of the important factors in trade:
India, South Korea agree to address widening trade deficit: With an aim to double bilateral trade from the current $27 billion to $54 billion by 2030, the Commerce Ministry has said India and South Korea agreed to address the widening trade deficit within the broader framework of their bilateral trade pact.
India, Canada to focus on low-hanging fruit, avoid sensitive sectors in CEPA negotiations: Commerce and Industry Minister Piyush Goyal has said that India and Canada have decided to prioritize low-hanging fruit, work on areas of convergence and avoid seeking concessions in sensitive sectors in the negotiations for the Comprehensive Economic Partnership Agreement (CEPA).
Central bank must allow rupee to depreciate to help absorb external pressures: Amid geopolitical uncertainty and the West Asia crisis weighing on local currency, the Former RBI Governor Duvvuri Subbarao has said the central bank must allow some more depreciation in the rupee to help absorb external pressures, and choose liquidity measures, rather than going for rate hikes, if inflation risks intensify.
