Stock markets will focus on global trends for further direction in this holiday-shortened week as the earnings season is largely over, analysts said.

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Trade experts expect the key benchmark indices to move sideways as investors are trying to decode the impact of rising inflation on foreign portfolio investments.

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Inflation data released by the US and China last week have fanned fears of earlier than expected rate hike and boosted US bond yields.

The US inflation hit a 30-year high level of 6.2 per cent YoY in October. China's CPI rose 1.5 per cent YoY, while the producer price index rose by 13.5 per cent YoY owing to imported inflation and domestic supply shortages.

Inflation concerns and the possibility an early rate hike can keep local stocks on edge as such indicators tempt foreign investors to pump out funds from emerging markets like India.

Indian stock markets declined for three days in a row last before a sharp recovery on Friday last due to inflation worries. Despite three days of losses, the 30-share BSE benchmark jumped 619.07 points or 1.03 per cent last week.

"We were seeing stock-specific movement amid the Q2 earning session and now the market's focus will shift to global cues," said Santosh Meena, Head of Research, Swastika Investmart Ltd.

"Given that most of the quarterly results and festive mood is behind us, indices are expected to move sideways. As markets across the world are trying to decode the implications of rising inflation, any intensive selling by FIIs may take Indian indices lower, unless the domestic players provide support," Yesha Shah, Head of Equity Research, Samco Securities said.

WPI inflation data is scheduled to be announced on Monday.

Rahul Sharma, Co-Founder, Equity99 said, "This week will be a shorter week with the market remaining close on Friday on account of Gurunanak Jayanti. Results season is over with only a few small and midcap companies left which will be declaring their results on Monday. Global events will be affecting the market."

Ajit Mishra, VP - Research, Religare Broking, said, "As the result season is almost behind us, the focus will shift back to global markets for cues."