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Benchmarks likely to make cautious start amid global trade uncertainty
Mar-12-2025

Indian equity benchmarks are likely to make a cautious start as uncertainty surrounding global trade after US and Canada moved back and forth on tariff decisions kept the market participants on edge. However, some support may come later in day amid reports indicating Indian government finalising export schemes to shield exporters from US tariffs. Moreover, investors will be eyeing India’s consumer price index (CPI) inflation for the month of February and Industrial Production data for January to be released later in the day, for more directional cues.

Some of the key factors to be watched:

Growth in net sales of FDI companies moderated to 9.3% in FY24: RBI has said that with the normalisation of post-pandemic pent-up demand conditions, the growth in net sales of select FDI companies moderated to 9.3 per cent during 2023-24 from the high of 20.3 per cent in the previous year.

India's employment outlook rises 43% in Q2 2025:  According to a private survey, Indian employers continued to report strong hiring intentions globally in the second quarter of this calendar year, with a Net Employment Outlook (NEO) of 43%.

Reduction in coal import leads to forex saving of around Rs 42,315 crore:  India's coal import dropped by 8.4 per cent to 183.42 million tonnes in the April-December period of the current fiscal, resulting in foreign exchange savings of around Rs 42,315 crore.

Centre finalising export schemes to shield exporters from US tariffs: The government is finalising the structure of new export promotion schemes that will facilitate adequate flexibilities to cushion the impact of proposed US tariffs, including the reciprocal tariffs.

Sugar stocks will be in focus: The All India Sugar Trade Association said India's sugar output for the 2024/25 marketing year, ending in September is projected to fall below consumption for the first time in eight years because of reduced sugarcane supplies in key states.

On the global front: The US markets ended lower on Tuesday amidst rising worries about global economic outlook, and fears of a possible recession in the U.S., due to tariff tensions between trade partners, however, losses remained capped after President Trump played down fears of a recession. Asian markets are trading mixed following mixed cues from Wall Street.

Back home, Indian equity benchmarks erased almost all of their initial losses and ended flat on Tuesday as investors preferred to remain on the sidelines awaiting further triggers ahead of macroeconomic data release. A steep decline in IT and banking stocks also kept investors wary. Finally, the BSE Sensex fell 12.85 points or 0.02% to 74,102.32, and the CNX Nifty was up by 37.60 points or 0.17% to 22,497.90.

Some of the important factors in trade:

Outflow of foreign capital: Foreign institutional investors (FIIs) offloaded equities worth Rs 485.41 crore on a net basis on Monday, according to exchange data. 

Investors eyed domestic economic data: Investors were looking ahead to the upcoming domestic economic data - consumer price index (CPI) and index of industrial production (IIP) - to be released tomorrow.  

Rupee gained against Dollar: Indian rupee recovered from steep losses and settled with gains against the US dollar as the American currency index fell to its four-month low level and crude oil prices also stayed subdued.
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