Indian equity markets are likely to make cautious start on Friday amid rising tensions between the U.S. and Iran in the Middle East. Sentiment may remain subdued as foreign institutional investors (FIIs) continued to be net sellers, offloading equities worth Rs 3,254.71 crore in the previous session. However, losses could be limited as investors take some support from the extension of the ceasefire between Lebanon and Israel.

Some of the key factors to be watched:

West Asia conflict, supply chain disruptions may create challenges to economy: RBI bulletin said persistent conflict in West Asia and supply chain disruptions could pose challenges to the domestic economy in the form of higher energy costs, input cost pressures, disruption in trade flows and financial market spillovers.

Engineering exports dip 66.8% to UAE; 45% to Saudi Arabia in March: The EEPC data has showed that India's engineering exports plunged 66.8 per cent to the UAE and 45 per cent to Saudi Arabia in March due to the West Asia crisis, which has impacted cargo ships movement in international waters.

India-Africa Forum Summit-IV to shape next phase of partnership: External Affairs Minister S Jaishankar has said the upcoming 4th India-Africa Forum Summit to be held from May 28-31 will define a more forward-looking partnership.

India, Qatar discuss ways to boost trade, strengthen supply chains: India and Qatar held discussions on ways to boost bilateral trade and strengthen supply chain resilience, which has been disrupted due to the West Asia crisis. The meeting was held between Commerce and Industry Minister Piyush Goyal and Qatari Minister of State for Foreign Trade Affairs Ahmed bin Mohammed Al Sayed.

Telecom stocks will be limelight: Sector regulator Trai said telecom companies added 92.7 lakh customers to over 133 crore subscribers in March, with Bharti Airtel leading the chart.

On the global front: The US markets ended in red on Thursday amid escalation of the conflict in the Middle East that could prolong the Strait of Hormuz closure. Asian markets are trading mostly in red on Friday following the broadly negative cues from Wall Street overnight.

Back home, Indian equity benchmarks ended lower for the second consecutive session on Thursday, as crude oil prices once again breached the $100 per barrel mark amid stalled US-Iran negotiations. Sustained foreign fund outflows, along with a weak trend in Asian and European equities, also unnerved investors. Finally, the BSE Sensex fell 852.49 points or 1.09% to 77,664.00 and the CNX Nifty was down by 205.05 points or 0.84% to 24,173.05.

Some of the important factors in trade:

India can potentially grow over 7% in 2026-27 even if crude oil costs $90-100 per barrel: Amid geopolitical tensions, industry body Assocham has said that the Indian economy, largely driven by consumption, has the potential to grow at over 7 per cent in 2026-27 even if crude oil costs $90-100 per barrel. 

Private sector growth picks up momentum in April: According to the data report, the HSBC Flash India Manufacturing PMI surged from 53.9 in March to 55.9 in April, while HSBC Flash India Services PMI Business Activity Index rose to 57.9 in April from March’s final reading of 57.5. 

Bank credit growth likely to ease below 12% in FY27 amid West Asia conflict: Domestic ratings agency ICRA in its latest report has said India’s banking sector is likely to see a moderation in credit growth in this financial year (FY27) largely due to ongoing conflict in West Asia and changing interest rate dynamics.