Indian equity markets are likely to make positive start on Thursday, tracking positive global market cues. Traders likely to take some support from encouraging Q1 earnings, mainly from Infosys. However, gains could be capped as traders remain cautious ahead of the release of India’s Manufacturing PMI Flash for July and the upcoming Nifty F&O expiry.

Some of the key factors to be watched:

India-UK trade pact to help boost exports of labour-intensive sectors: The Federation of Indian Export Organisations (FIEO) said that the proposed trade pact between India and the UK is likely to benefit sectors such as textiles, leather, gems and jewellery, pharmaceuticals, marine and engineering goods.

India, UK to sign free trade agreement: India and the UK will sign a free trade agreement on July 24, 2025 in London that will allow export of labour-intensive products such as leather, footwear and clothing at concessional rates, while making imports of whisky and cars from Britain cheaper.

Indian economy held up amidst tariff policy uncertainties: Reserve Bank's Bulletin said that the India's economic activities held up during June-July amidst geopolitical tensions and tariff policy uncertainties.

Finance Commission needs to focus on strengthening local bodies: Former RBI Governor Raghuram Rajan has said that the 16th Finance Commission should focus on devolving more funds to local bodies, municipalities and panchayats to enable them effectively deal with problems facing the people.

Trade pact between the US and Indonesia raises concerns in India: Think tank GTRI said that the US-Indonesia trade pact reflects how Washington's pressure tactics can compel countries to cut tariffs, commit to large purchases, and loosen regulatory control, and India should tread cautiously in ongoing trade talks to avoid similar concessions.

On the global front: The U.S. markets ended in green on Wednesday, after President Donald Trump announced trade deals with Japan and the Philippines. Asian markets are trading in green on Thursday, supported by positive trade developments between the US and Japan, along with encouraging signals of progress in talks with the European Union.

Back home, Indian equity benchmarks ended over half percent higher on Wednesday, following a positive trend in Asian markets after Japan secured a trade deal with the US. Following an initial uptick, the markets moved in a narrow range during the first half; however, strength in select heavyweights, particularly from the Telecom, Auto and banking sectors, propelled the indices higher. Finally, the BSE Sensex rose 539.83 points or 0.66% to 82,726.64 and the CNX Nifty was up by 159.00 points or 0.63% to 25,219.90.   

Some of the important factors in trade:

Financial inclusion index improves to 67 in March 2025: Reflecting deepening of financial inclusion and sustained financial literacy initiatives, the data released by the RBI has showed that the Financial Inclusion Index (FI-Index), which captures the extent of financial inclusion across the country, improved to 67.0 in March 2025 from 64.2 in March 2024.

PLI scheme saves Rs 1362 crore on drug imports till March 2025: Minister of State for Chemicals and Fertilisers, Anupriya Patel has said that imports of pharma raw materials worth Rs 1,362 crore have been avoided till March 2025 due to the creation of domestic manufacturing capacity for 25 identified items under the production-linked incentive (PLI) scheme for bulk drugs. 

India's FY26 GDP growth forecast trimmed to 6.3%: Traders overlooked India Ratings & Research (Ind-Ra) report in which it has trimmed India's growth projection for the current fiscal to 6.3 per cent, citing uncertainties around US tariffs and weak investment climate.