Global trends, inflation data, earnings to drive markets: Analysts

Domestic equity markets are likely to see volatility in a range-bound trade this week amid geopolitical worries and growing expectations of a sharp hike in interest rates, analysts said.

Global trends, inflation data and the last batch of quarterly earnings will drive the markets this week, they said. Besides, the rupee movement, FII investment pattern and Brent crude trends would also be watched by investors.

"World markets are trying to adjust with expectations of a sharp rise in interest rates in the US after record inflation but the elevating geopolitical tension is trying to make things worsen," said Santosh Meena, Head of Research, Swastika Investmart Ltd.

On the domestic front, inflation data will be released this week while the tail-end of earning session will have an impact on some individual stocks.

"On the political front, developments in the assembly polls of Uttar Pradesh, Uttarakhand, Goa, Punjab and Manipur will be closely watched," Meena said.

The behaviour of FIIs will also be an important factor because they are selling relentlessly, he added.

Breaking their selling spree, FIIs were net investors in stocks on Friday, putting in Rs 108.53 croe on net basis in equities. FIIs have pulled out over Rs 14,930 crore on net basis from capital markets this month. Barring two sessions, they have remained net sellers in capital markets in February.

Last week, the 30-share BSE benchmark declined by 491.90 points or 0.83 per cent.

Adani Enterprises, Coal India, Eicher Motors, Ambuja Cements, Nestle India, Spicejet and Jet Airways are among the companies that will announce their financial results this week.

"After the reaction to US's inflation, investors globally will be focused on gaining a clearer understanding of the Fed's action, as the minutes of the most recent FOMC meeting are set to be released.

"Another significant metric to watch will be China's inflation data. D-Street investors will be keeping a close eye on the domestic inflation rate to predict its future path. Given these events, markets are largely expected to remain volatile and range-bound," said Yesha Shah, Head of Equity Research, Samco Securities.

Benchmark indices tumbled on Friday tracking heavy selling in global equities after US consumer inflation soared in January, raising the prospects of faster-than-expected rate hikes by the Federal Reserve.

Ajit Mishra, VP Research, Religare Broking, said, "With major events behind us, the focus would on global markets and earnings for cues. On the macro front, participants will first react to IIP data on Monday i.e. Feb 14. Besides, both CPI inflation and WPI inflation are also scheduled for Feb 14."

Global cues such as inflation concerns and Russia-Ukraine tension are currently weighing on the sentiment, he added.

Vinod Nair, Head of Research at Geojit Financial Services, said the direction of the market in the week ahead will be determined by cues from global markets while domestic macroeconomic data and corporate earnings will continue to remain in focus in the near term.