Indian equity markets are likely to make gap-up start on Monday tracking strong cues from global markets. Investors may take support as India has reached for an interim trade agreement with the US. 

Some of the key factors to be watched: 

US removes duty on Indian goods: The US said that India has committed to stop directly or indirectly importing Russian oil, following which the additional 25 per cent tariffs imposed by America on Indian goods will be removed from February 7, 2026. 

India gains trade edge over China in US: Commerce and Industry Minister Piyush Goyal said that Indian goods will have a competitive advantage in US markets compared to products from China and other competitor countries, which face higher levies, following the reduction in reciprocal tariffs to 18 per cent.

FPIs turn net buyers in first week of February: After three consecutive months of heavy selling, foreign portfolio investors (FPIs) turned net buyers in the first week of February, infusing more than Rs 8,100 crore in Indian equities, aided by improving risk sentiment, along with a trade deal with the US.

Net impact of AI on jobs positive: Reserve Bank Deputy Governor Poonam Gupta has said the net impact of artificial intelligence (AI) on jobs will be a positive one. However, she said there will be a churn as some jobs get lost, and the challenge will be in managing transition to the new technology. 

RBI exempts smaller NBFCs from registration: Reserve Bank Governor Sanjay Malhotra has proposed exempting smaller NBFCs, those with assets under Rs 1,000 crore and no public funds, from mandatory registration, citing their low systemic risk.

On the global front: The US markets recovered lost ground on Friday and ended higher as traders preferred to buy stocks at reduced levels following the recent weakness. Asian markets are trading mostly in green on Monday following the broadly positive cues from Wall Street on Friday. 

Back home, Indian equity benchmarks pared early losses to end the day higher on Friday, helped by a jump in FMCG shares, but IT sector bled, limited the gains. Traders took a note of report that the Reserve Bank of India’s Monetary Policy Committee (MPC) has kept the benchmark repo rate unchanged at 5.25 per cent and maintained policy stance at 'neutral', citing a resilient economy amid evolving macroeconomic conditions. Finally, the BSE Sensex rose 266.47 points or 0.32% to 83,580.40 and the CNX Nifty was up by 50.90 points or 0.20% to 25,693.70.

Some of the important factors in trade:

India-US trade deal enters final phase: Expressing optimism over early conclusion of India-US trade agreement, External Affairs Minister S Jaishankar has said that this historic trade agreement is in the final stages of detailing and is likely to be completed very soon.

Proposed Rs 17.2 lakh crore market borrowings to be managed non-disruptively: Economic Affairs Secretary Anuradha Thakur has said the record gross market borrowing target of Rs 17.2 lakh crore for FY27, announced by the government in budget, will be carried out in a non-disruptive manner.  

India’s imports from China dip in 2024-25: Minister of State for Commerce and Industry Jitin Prasada said India's imports from China have declined in multiple sectors such as fertilisers, chemicals, iron and steel and man-made yarn in 2024-25.