The Indian equity market, which will resume trade on Monday after a four-day-long break, will track domestic events like the central bank's first bi-monthly monetary policy review for the 2018-19 financial year, along with the release of macro-economic and automobile sales data, for direction in the upcoming week.
Along with domestic factors, global market sentiment, as well as crude oil prices and the course of foreign and domestic funds are also expected to influence investors' risk-taking appetite during the week ahead.
"Next week will be the commencement of the new financial year after the long weekend and markets would look forward to the PMI (Purchasing Managers' Index) numbers. The Reserve Bank of India (RBI) monetary policy committee meeting is scheduled on Thursday," Devendra Nevgi, Founder and Principal Partner, Delta Global Partners, told IANS.
According to Nevgi, markets are not expecting any action from RBI in terms of changes in policy rate, but the language would be scrutinised closely to ascertain its stance.
Macro-data scheduled to be released next week include the Nikkei India PMI data for the manufacturing sector on Monday and for services sector on Wednesday.
"The response of banks to the commencement of India's borrowing programme remains the key for interest rates. The global sentiments, especially towards technology stocks in the US, remain important. The fall in interest rates in the US (10 year) as well as in India should help the sentiment," he added.
Last week, the Central government's decision to borrow only Rs 2.88 lakh crore through its benchmark bond scheme in the first half of FY19 -- 47.5 per cent of the total budgeted amount -- as against 60-65 per cent share in this period in previous years, had lifted investors' sentiments.
Also, positive global cues on the back of trade war fears easing between major world economies had pulled the key Indian equity indices from their five-month lows to close with substantial gains.
On a weekly basis, the barometer 30-scrip Sensitive Index (Sensex) of the Bombay Stock Exchange (BSE) closed at 32,968.68 points -- gaining 372.14 points or 1.14 per cent -- while the wider Nifty50 of the National Stock Exchange (NSE) closed trade at 10,113.70 points -- up 115.65 points or 1.16 per cent from its previous week's close.
D.K. Aggarwal, Chairman and Managing Director of SMC Investments and Advisors, said that, apart from the outcome of the RBI monetary policy meet and macro-economic data, the trend in the global markets will also set the course for the domestic bourses next week.
"The trend in the global markets, investment by foreign portfolio investors (FPIs) and domestic institutional investors (DIIs), the movement of the rupee against the dollar and crude oil price movement will dictate the trend of the market," Aggarwal told IANS.
Last week, the Indian rupee weakened by 17 paise to close at 65.18 against the US dollar from its previous week's close at 65.01.
Provisional figures from the stock exchanges showed that foreign institutional investors (FIIs) sold scrips worth Rs 868.62 crore, while the DIIs purchased stocks worth Rs 6,151.53 crore during the truncated trade week.
Figures from the National Securities Depository revealed that FPIs invested in equities worth Rs 3,214.27 crore, or $494.08 million, during March 26-28.
In the upcoming week, initial sentiments in market trading will be driven by global clues and the on-going ICICI Bank crisis, said Gaurav Jain, Director at Hem Securities.
"Eventually, all focus will shift to the RBI policy. We will also see some stock-specific action on account of a rejig in the Nifty50 index. Bajaj Finserv, Grasim Industries and Titan Company will replace Ambuja Cements, Aurobindo Pharma and Bosch in the Nifty50 index from Monday," said Jain.
"Beside the RBI policy, auto stocks will be in focus as the auto companies start announcing monthly sales numbers for March 2018 starting from April 1," he added.
Deepak Jasani, Head of Retail Research for HDFC Securities, maintained that on technical levels, the Nifty50 remained in a downtrend for the week ahead.
"Technically, the Nifty remains in downtrend and further downsides are likely early next week once the immediate support of 9,958 is broken," Jasani told IANS.
"Immediate resistance is now at 10,228," he added.