Foreign investors' trading activity key driver in holiday-shortened week

The last batch of quarterly earnings, global trends and trading activity of foreign investors will guide the equity market movement in a holiday-shortened week ahead, analysts said.

Volatility may continue amid investors' cautious approach in the election season.

Markets will remain closed on Monday due to the fifth phase of the Lok Sabha elections in Mumbai.

"We are at the end of Q4 earnings. Positive earnings reports could provide some relief in this uncertain market," said Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd.

US Fed Chair Jerome Powell is scheduled to deliver a speech on Monday, which is likely to influence market sentiments, Gour said.

Furthermore, upcoming economic data releases from Japan and the US, along with movements in the global currency market, will also be important factors to consider, he added.

ONGC, SAIL, BHEL, JK Tyre, One97 Communications, Power Grid, InterGlobe Aviation, ITC and NTPC will announce their quarterly earnings this week.

"The outlook for the market will be guided by the major domestic and global economic data, such as India's PMI manufacturing and service data, UK inflation data, US initial jobless claims, S&P global services data and S&P global manufacturing PMI and Q4 corporate results," Arvinder Singh Nanda, Senior Vice President, Master Capital Services Ltd, said.

Investors will also keep an eye on the rupee-dollar trend and global oil benchmark Brent crude.

"While volatility could increase over the next couple of weeks, selective buying in key frontline, mid and smallcap stocks will persist," said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.

Vinod Nair, Head of Research, Geojit Financial Services, said, "Amidst ongoing uncertainties surrounding election results and quarterly earnings, we anticipate continued volatility in the near term".

Last week, the BSE benchmark climbed 1,341.47 points or 1.84 per cent, and the Nifty went up by 446.8 points or 2 per cent.

The National Stock Exchange (NSE) and BSE conducted a special trading session in the equity and equity derivative segments on May 18 to check their preparedness for handling major disruptions or failures at the primary site.