India equity benchmarks set to open higher on hopes of easing trade woes

India’s stock benchmarks are set to open higher on Tuesday, tracking Asian peers, as optimism over progress in U.S. trade negotiations with China and India lifts sentiment ahead of the Federal Reserve’s rate decision.

Gift Nifty futures were trading at 25,158.5 points as of 07:44 a.m. IST, indicating that the benchmark Nifty 50will open above Monday’s close of 25,069.2.

Other Asian markets opened higher, with the MSCI Asia ex-Japan index rising 0.6%.

U.S. and Chinese officials said on Monday they have reached a framework agreement to switch short-video app TikTok to a U.S-controlled ownership that will be confirmed in a Friday call between U.S. President Donald Trump and China’s Xi Jinping.

Meanwhile, India and the U.S. will hold trade talks on the day, raising hopes of a breakthrough weeks after the U.S. imposed punitive tariffs on New Delhi for buying Russian oil.

Easing trade tensions is likely to have a positive impact on several sectors of the Indian markets exposed to the world’s largest economy.

Investors await an anticipated 25-basis-point Fed rate cut on Wednesday, with the U.S. central bank expected to leave the door wide open to a series of cuts.

Lower U.S. interest rates make emerging markets like India attractive to foreign portfolio investors (FPIs), as Treasury yields and the dollar typically fall in such a scenario.

Back home on Monday, the Nifty 50 snapped an eight-session winning streak, its longest in a year since September 3, 2024, dragged by a pullback in information technology stocks after last week’s rally.

The FPIs offloaded Indian shares worth 12.69 billion rupees ($144 million) on Monday, while domestic institutional investors bought shares worth 19.33 billion rupees, per provisional data from the NSE.