Key inflationary trends, combined with the ongoing quarterly result season, are expected to determine the movement of equity indices next week.
The sharp deceleration in the rate of India's industrial output growth is also expected have an impact on investors' sentiments.
Additionally, global cues such as concerns over the rise in crude oil prices and trade talks between the US and China, along with the direction of foreign fund flows, will affect the risk-taking appetite of investors.
"Going forward, the market will closely watch guidance and management commentary of the companies coming out with their earnings," SMC Investments & Advisors CMD D.K. Aggarwal told IANS.
"Besides, third quarter results, macroeconomic data, trend in global markets, investment by foreign portfolio investors (FPIs) and domestic institutional investors (DIIs), the movement of rupee against the dollar and crude oil price movement will dictate the trend of the market going forward."
In the coming week, companies like Reliance Industries, Cyient, Hindustan Unilever, Rallis India, ICICI Securities, Multi Commodity Exchange of India, Mindtree, SBI Life Insurance Company and Wipro are expected to announce their Q3 earning results.
According to Sahil Kapoor, Chief Market Strategist, Edelweiss Investment Research: "The breadth of the market suggests that the underlying strength of the broader market is still absent. NSE500 Index which is much broader than the Nifty is still trading below its 200DMA."
"As we move into the thick of the result season the index is likely to see a break of this trading range. If the index were to trade below 10,700 mark a fall towards 10,400 to 10,500 range is likely and a retest of 2018 lows would also rise in probability."
Apart from the Q3 results, investors will look out for the upcoming macro-economic data points such as CPI (Consumer Price Index), Wholesale Price Index (WPI) and
and the Balance of Trade figures.
The Central Statistics Office (CSO) is slated to release the macro-economic data points of CPI (Consumer Price Index) on Jan 14.
Besides, a volatile rupee against the US dollar might hamper market's northward moves.
"The rupee has got concerns from rising crude and risk of fiscal slippage in poll bound nation... any breach above 70.60 levels can take it to 71.50 levels. On the lower side 69.80 can be seen if any softness in crude is seen," said Edelweiss Securities' Head of Forex and Rates Sajal Gupta.
"Any positive development on resolution of global trade concerns can be a positive backdrop for rupee to appreciate in coming week."
On a weekly basis, the Indian rupee weakened by 77 paise to 70.49 against the US dollar from its previous close of 69.72.
In addition, direction of foreign fund flows will be the another major theme for the equity market.
As per the provisional data released by stock markets, FIIs remained net sellers to the tune of over Rs 500 crore during the week ended Friday.
Last week, the key Indian equity indices -- the BSE Sensex and the NSE Nifty50 -- rose despite a rise in global crude oil prices and heavy outflow of foreign funds, partly owing to an ease in liquidity and hopes of the US-China trade war being resolved.
Consequently, the barometer 30-scrip Sensitive Index (Sensex) of the BSE gained 314.74 points, or 0.88 per cent, to close at 36,009.84 points.
Similarly, the wider Nifty50 of the National Stock Exchange (NSE) made healthy gains. It closed trade at 10,331.60 points -- up 67.6 points, or 0.63 per cent, to settle at 10,794.95.
(Rohit Vaid can be contacted at email@example.com)
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