As the Indian stock market remains largely bullish with intermittent correction and consolidation, wholesale inflation data, global cues along with the trend in the foreign institutional investments (FII) will drive the domestic indices in the coming week, analysts said.

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Siddhartha Khemka, Head of Retail Research, Motilal Oswal Financial Services noted that post the sharp rally after the budget, the Indian equity market saw some consolidation in the week ended Friday, although it ended on positive note.

Global cues were mixed as prospects of higher US fiscal stimulus and larger vaccine rollouts globally, along with dovish Federal Reserve outlook kept the overall mood positive, he said.

"Going ahead, with the earnings season largely over, global cues will dictate the short-term market trend. Market would react to the key macro data -- IIP, CPI and WPI data," Khemka said.

The Wholesale Price Index for January, which shows the wholesale inflation rate, will be released on Monday.

Lower food prices, especially those of vegetables and cereals, brought down India's sequential retail price inflation in January 2021. The Consumer Price Index (CPI) released on Friday declined to 4.06 per cent from 4.59 per cent reported for December 2020.

Further, the Index of Industrial Production (IIP) for December released on Friday showed that the factory output grew by 1 per cent in December 2020 from a contraction of (-) 2.09 per cent in November and rose to 0.4 per cent during the corresponding month of the previous year.

Favourable base effect, along with a broad-based rise in production across sectors, accelerated India's industrial activity in December.

Motilal Oswal's Khemka added that next week, European Central Bank's monetary policy will also be eyed along with India's trade balance data.

"From the long-term perspective, the structure of the market remains constructive, and one can apply buy on dips strategy," he added.

On the foreign fund inflow, S. Ranganathan, Head of Research at LKP Securities noted that several reforms aimed at protecting shareholder rights in have improved ease of doing business and FPI's have invested Rs 39,000 crore till date during in 2021 into Indian equities.

Sectors like private banks, consumer, FMCG and IT have seen foreign flows as Indian companies have exhibited resilience and demonstrated growth post lifting of the lockdown restrictions in Q3, he said.

"We expect foreign flows to be positive in Q4 as well in line with the trend so far as the Budget has been pro-growth with privatisation gaining ground," Ranganathan added.

In the week ended Friday, the Nifty50 and the Sensex gained 1.6 per cent and the markets ended in the green on three out of the five trading days.

On Friday, the indices ended on a flat note. The BSE Sensex closed at 51,544.30, higher by just 12.78 points or 0.02 per cent from its previous close.

The Nifty50 on the National Stock Exchange (NSE) closed at 15,163.30, lower by 10 points or 0.07 per cent.

Deepak Jasani, Head of Retail Research at HDFC Securities noted that Indian markets posted gains for the second week in a row driven by positive global cues.

"However, gains were capped as investors took some profits off the table after a strong rally post Budget," he added.