Impressive buying by foreign fund houses and hopes of rate cut by the Reserve Bank of India Governor Raghuram Rajan helped benchmark indices BSE Sensex and NSE Nifty to surge 10 per cent in March 2016. However, these indices wiped off some gains this month by falling over 2.5 per cent till April 7 ahead of corporate earnings season. Foreign Institutional Investors bought shares worth Rs 21,142.92 crore (net) in March. They offloaded shares of worth Rs 5521.39 crore and Rs 11126.44 crore in Jan and Feb 2016 respectively. For the ongoing financial year, analysts believe that domestic equity market is likely to remain range-bound with an upward trajectory during 2016-17. Aasif Hirani, director, Tradebulls said, \u201cNifty earnings growth is expected in the range of 16-18 per cent in FY2017, which is largely based on expected revival in urban consumption and an improvement in rural demand. Also upturn in the commodity cycle, lowering interest rate and receding of pain in the banking system will also help in reviving the earnings growth and our market.\u201d On the other hand, with the help of market experts we collate some challenges which can act as spoilsport in the expected market rally. 1) Uncertainty regarding US Federal reserve raising interest rate and its monetary policy outlook will create jitters both in domestic as well as international markets. Vaibhav Agrawal, VP and head of research, Angel Broking, said, \u201cIndian equity markets would have external challenges to face, which includes concerns emanating from any slowdown in the global markets, announcement of rate hikes in the US.\u201d Interest rate hike in US markets, could lead to flight of money from the Indian markets to US markets. 2) Issues in PSU as well as private banks that are laden with NPA problems. 3) Delay in reforms and policy measures taken in Budget will also have its course in coming quarters. Siddhartha Khemka, head, research (wealth), Centrum Broking, said, \u201cThe government reform measures are taking time to reflect in the economy, as and when that starts, it will help in economic growth.\u201d 4) The country faced two back-to-back weak monsoons. Hence any deficiency in rains this year could be a big challenge for the economy. 5) According to India Ratings and Research, the benefits of lower commodity prices for some sectors are likely to fade away in FY17; however lower interest costs could support corporate profitability on a broader basis. Given the stability in working capital, currency risk could be the biggest challenge for Indian corporates in FY17.