Quarterly earnings and global developments would be the major factors driving equity markets in the holiday-shortened week ahead, analysts said.
Foreign fund movement will also play a crucial role in deciding the trend, they added.
Markets will remain closed on Tuesday for Muharram.
“This week market will deal with the last batch of Q1 earnings where it will react to SBI, HPCL and BPCL results on Monday, while Adani Ports, Bharti Airtel, PowerGrid, Coal India, Eicher Motors, Hindalco, Grasim, Hero Motocorp, LIC, ONGC and Bata India will be other prominent earnings during the week,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.
The country’s biggest lender State Bank of India (SBI) on Saturday posted a 7 per cent decline in standalone net profit at Rs 6,068 crore for the first quarter of the current financial year on account of mark-to-market (MTM) losses.
Hindustan Petroleum Corporation Ltd (HPCL) on Saturday reported its highest-ever quarterly net loss of Rs 10,196.94 crore in the June quarter as a freeze on petrol and diesel price revision wiped away record refining margins.
Global cues will be important as geopolitical concerns are rising whereas both domestic and global macro numbers will play an important role, Meena added.
India will announce its CPI and IIP data on August 12, while US inflation numbers will be released on August 10.
“This week is a holiday-shortened one and participants will be closely eyeing global markets and domestic factors viz. earnings and macroeconomic data for cues.
“Further escalation of China-Taiwan tension may result in volatile swings. On the data front, we have IIP and CPI inflation scheduled for August 12,” said Ajit Mishra, VP – Research, Religare Broking Ltd.
The 30-share BSE benchmark Sensex advanced 817.68 points or 1.42 per cent last week.
It was the third straight week of gains for the Indian equity markets, thanks to continuous buying by FIIs. However, volatility has jumped at higher levels as the market is a little overbought, Meena of Swastika Investmart added.
Apurva Sheth, Head of Market Perspectives, Samco Securities, said, “On a macroeconomic front, this week is expected to be jam-packed for investors. The global markets are likely to dance to the tune of the inflation figures to be released by the United States and China. Back home, market players will turn to the Indian CPI print for hints about the economy’s trajectory.” With the overhang of monetary policy now behind us, the geopolitical tension between China and Taiwan will be in focus, as any flare up in the region may lead to panic situations across the globe, said Amol Athawale, Deputy Vice President – Technical Research, Kotak Securities Ltd.