Indian equity markets are expected to open cautiously on Thursday, tracking weakness in Asian markets amid concerns over U.S. Federal Reserve policies and lingering tariff issues. Investor sentiment remains subdued as foreign portfolio investors (FPIs) resumed their selling streak on Wednesday, offloading shares worth RS 1,881.30 crore.

Key Factors to Watch:

🔹 US Tariffs to Have Limited Impact on India
S&P Global Ratings stated that the impact of U.S. reciprocal tariffs on India will be minimal due to the country's domestic-oriented economy with low export dependence. It projected India's GDP growth to be around 6.7-6.8% over the next two years.

🔹 Economic Activity Shows Sequential Improvement
According to the RBI Bulletin, high-frequency indicators such as vehicle sales, air traffic, steel consumption, and GST E-way bills signal a sequential uptick in economic momentum during the second half of FY 2024-25, with sustained growth ahead.

🔹 India-Argentina Strengthen Lithium Cooperation
India and Argentina have signed an agreement to enhance collaboration in the exploration and resource development of critical minerals, particularly lithium.

🔹 Power Stocks in Focus
Moody’s Ratings highlighted that India’s power sector, the highest carbon emitter, requires an investment of USD 700 billion over the next decade to help achieve the country’s 2070 net-zero target.

🔹 Indian Pharma Sector Faces Tariff Risk
U.S. President Donald Trump has reportedly indicated plans to impose a 25% or higher tariff on semiconductor and pharmaceutical imports, which could significantly impact India’s pharmaceutical industry.

Global Market Trends:

U.S. markets closed higher on Wednesday as investors analyzed the Federal Reserve’s January meeting minutes and Trump's tariff plans. However, Asian markets traded mostly in the red on Thursday after the Fed signaled no urgency in cutting interest rates.

Domestic Market Performance:

On Wednesday, Indian markets remained volatile, fluctuating between gains and losses before closing flat with a negative bias. The BSE Sensex fell 28.21 points (0.04%) to 75,939.18, while the CNX Nifty declined by 12.40 points (0.05%) to 22,932.90.

Key Trade Factors:

🔹 Tariff-Driven Trade War Concerns
Market sentiment remains cautious as the first round of U.S.-Russia talks on a potential Ukraine peace deal ended without a clear resolution. Meanwhile, Trump’s proposed 25% tariffs on autos, pharmaceuticals, and semiconductors add to investor concerns.

🔹 FII Investment Reversal
Foreign Institutional Investors (FIIs) turned net buyers on Tuesday after consistent selling, purchasing equities worth RS 4,786.56 crore, according to exchange data.

🔹 India’s GDP Growth Projection
SBI Research has estimated India’s GDP growth at 6.3% for FY25, citing a stable rural economy that is supporting overall economic momentum.