Inflation data based on wholesale price index and investment trend by foreign funds would drive stocks in the holiday-shortened week ahead where volatility is expected to be high ahead of the Budget, say experts.
Profit-booking may also be on the cards as benchmark indices Sensex and Nifty on Friday logged their fourth successive session of gains and regained 29,000 level and 8,800 mark respectively.
Shares of HDFC Bank and ONGC will on Monday react to their quarterly earnings that were announced on Saturday.
WPI inflation data for January, which is expected to be released during market hours on Monday, is expected to provide cues on price rise.
With the retail inflation under control (with reference to Jan-15 target of 8 per cent), market participants say enough space has been created for further rate cuts by RBI.
Stock markets would remain closed on Tuesday on account of Mahashivratri.
Shares of PSU oil marketing companies will also be in focus as investors track global crude oil rates.
“Going ahead, global cues and economic developments shall be driving force for markets. We can expect volatility ahead of the Budget outcome,” said Rakesh Goyal, Senior Vice President, Bonanza Portfolio.
In key earnings this week, Ambuja Cements will announce results on February 18.
Investors are keenly focused on the the new government’s first full-year budget, looking at it as a gauge to measure the government’s reform momentum.
Going ahead, the pre-budget expectations will start building up and the corresponding sectors may see increased interest, brokers said.
Globally, Japanese industrial production data for December will be announced on Monday. Markit Manufacturing and Services PMI of Germany for the month of February are scheduled on Friday and on the same day, US Markit Manufacturing PMI for the month of February will be out.
Euro Zone finance ministers will meet on Monday to discuss Greece’s debt crisis. Greece’s current bailout plan expires at the end of this month.