Indian equity markets are likely to make cautious start on Monday amid mixed global cues. There will be some cautiousness in the markets amid lingering uncertainty surrounding US President Donald Trump’s 50% tariffs imposition on Indian goods. Meanwhile, foreign funds inflows by Foreign Institutional investors (FIIs) may limit the downside. The FIIs were the net buyers on Friday’s session with net buying of Rs 1,850.55 crore worth of equities.

Some of the key factors to be watched:

Indian economy is robust: Countering Donald Trump's dead economy jibe, sixteenth Finance Commission Chairman Arvind Panagariya said that the Indian economy is growing at 7% and more than that in dollar terms.

Comprehensive land reforms needed for India to become manufacturing hub: Industry body CII has pitched for comprehensive land reforms such as the formation of a GST-like Council to enable coordinated and consensus-based reforms and uniform stamp duty rates of 3% to 5% across the country for India to become a global manufacturing hub.

SEBI moots lighter regulatory framework for AIFs with accredited investors: Capital markets regulator SEBI has proposed a separate category of Alternative Investment Fund (AIF) schemes, consisting of accredited investors, which will enjoy a lighter-touch regulatory framework compared to regular AIFs.

Forex reserves drop $9.32 billion to $688.87 billion: RBI’s data showed that India's forex reserves dropped by $9.32 billion to $688.87 billion for the week ended August 1 in one of the highest declines in the recent past.

Public sector OMC stocks will be in focus: The Union Cabinet has approved compensation amounting to Rs 30,000 crore to the three Public Sector Oil Marketing Companies (IOCL, BPCL & HPCL) for the under-recoveries incurred on sale of domestic LPG.

On the global front: The US markets ended higher on Friday as traders shrugged off concerns about the economic impact of President Donald Trump's new tariffs on dozens of US trading partners. The Asian markets are trading mixed on Monday as investors awaits an announcement on whether the August 12 deadline for the US-China tariff truce would be extended.

Back home, Indian equity benchmarks witnessed sharp selloff on Friday and closed the day lower by around a percent, due to losses in Realty, Telecom and Metal stocks. This weakness is mainly attributed to continued selling by foreign funds and the announcement of higher tariffs by the United States on Indian goods. Finally, the BSE Sensex fell 765.47 points or 0.95% to 79,857.79 and the CNX Nifty was down by 232.85 points or 0.95% to 24,363.30.

Some of the important factors in trade:

There will be no trade negotiations with India until dispute over tariffs resolved: Following Trump’s administration’s decision to double tariffs on Indian imports, U.S. President Donald Trump has said there will be no trade negotiations with India until a dispute over tariffs is resolved.  

US tariff impact on India’s GDP growth: Amid ongoing concerns over US’ tariff on India, Moody's Ratings has said the country’s Gross Domestic Product (GDP) growth is likely to slow down by about 30 basis points to 6% in the current fiscal (FY26) if the US implements 50% tariffs from August 27.

India's electronics exports surge over 47% to $12.4 billion in Q1FY26: The India Cellular and Electronics Association (ICEA) in its latest data has said that India's electronics exports surged over 47 per cent year-on-year to $12.4 billion in the first quarter of fiscal year 2025-26 (Q1FY26), driven by a robust performance in the mobile phone segment.