Budget, earnings major driving factors for markets this week: Analysts

In an eventful week ahead, stock market investors will take cues from major events like the US Federal Reserve's interest rate decision, the upcoming Union Budget and Q3 earnings, analysts said.

Besides, global factors, trading activity of foreign investors, rupee-dollar trend and movement of international oil benchmark Brent crude would also influence trading in the equity market, according to experts.

"All eyes are now on the upcoming Union Budget, scheduled for February 1, as the market looks for a meaningful trigger to shift sentiment positively. The ongoing Q3 earnings season has been lacklustre so far, especially in the consumption and financial sectors.

"On the global front, the Federal Open Market Committee (FOMC) policy meeting will be critical," Santosh Meena, Head of Research, Swastika Investmart Ltd, said.

Additionally, movements in the US bond yields and the Dollar Index will remain important to track. Signs of reversals in these two areas could drive positivity in global markets, Meena said.

For the Indian equity market, FII flows will continue to play a crucial role, he added.

Stock markets will remain open for trading on February 1, Saturday, for the Union Budget presentation, BSE and NSE had announced last month.

This week is important, not just for the equity markets but for the economy as well, with the Union Budget scheduled for February 1 (Saturday)," Ajit Mishra SVP, Research, Religare Broking Ltd, said.

Additionally, several companies, including Tata Steel, Bajaj Auto, Maruti, Tata Motors, ONGC and IndusInd Bank are set to release their earnings during the week, Mishra said.

"On the global front, key events like the US FOMC meeting and statements from the US President will also influence market sentiment," he added.

Last week, the BSE benchmark index declined 428.87 points or 0.55 per cent, and the Nifty dipped 111 points or 0.47 per cent.

Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services Ltd, said, "Domestic equities are expected to trade within a broad range with some volatility amidst the Q3 result season, unfolding of the US President Trump's economic policies and the Union Budget on Saturday."  PSU and capex-themed stocks such as railway, defence, capital goods will be in focus ahead of the Budget, Khemka added.

Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said that investors are likely to maintain caution ahead of the upcoming Union Budget announcement.