Global factors, crude oil movement, macro data key factors to drive markets next week - analysts believe volatility may continue

Macroeconomic data, global trends, crude oil movement and FII activity are among key triggers which are likely to drive the Indian markets next week and it also may remain volatile ahead of the start of the quarterly earnings season, analysts said.

Tepid global cues and nervousness ahead of the earnings season have impacted sentiment, they said.

"There is selling exhaustion at lower levels as market is bouncing back from every intra-day dip amid headwinds like fall in global markets, rupee weakness, and windfall tax on domestic refineries.

"FIIs are still selling but the momentum has come down significantly, therefore, bulls will look for a relief rally if global markets remain stable," said Santosh Meena, Head of Research, Swastika Investmart Ltd.

Crude oil prices, dollar index and rupee movement will be other dominating factors, Meena added.

"This week marks the beginning of the earnings season and IT major TCS would announce its numbers on July 8. Participants will be closely eyeing its results for any change in the guidance amid fears of a global slowdown.

"Besides, performance of global indices, crude movement and updates on the ongoing tussle between Russia and Ukraine will be in focus," Ajit Mishra, VP - Research, Religare Broking Ltd, said.

From macroeconomic data announcement, Purchasing Managers' Index (PMI) services sector data on Tuesday would also influence trading.

Yesha Shah, Head of Equity Research, Samco Securities, said, "Market is expected to remain volatile due to a slew of market-moving events. On the macroeconomic front, investors will be watching the Federal Open Market Committee (FOMC) minutes to see where the economy is headed. Furthermore, global markets would be influenced by China's inflation figures, which are due this week.

"Back home, the first quarter earnings season will drive market sentiment and stock-specific actions."

Last week, the Sensex went up by 179.95 points or 0.34 per cent, while the Nifty gained 52.80 points or 0.33 per cent.

Markets remained resilient despite lots of headwinds where the headline indices managed to close with gains for the second straight week, analysts said.

"Nifty has been stuck in a broader range for the last 15 trading sessions and has been witnessing increased volatility. We expect markets to remain subdued with downward pressure going forward as global headwinds remain a key overhang," Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd, said.