Markets to track FII trading, macroeconomic data, global trends this week: Analysts

Macroeconomic data announcements, trading activity of foreign investors and global trends will guide equity market movement this week, which would also mark the beginning of the new calendar year and month, analysts said.

Movement of rupee, which registered the steepest fall in almost two years to hit its lifetime intra-day low on Friday, will also be tracked by investors.

"Persistent FIIs (Foreign Institutional Investors) selling has been a source of pressure on Indian markets, and their stance in the new year could shape near-term trends.

Meanwhile, monthly auto sales data will also be closely watched. As the Q3 earnings season approaches, corporate quarterly updates will begin trickling in, setting the stage for market expectations," Santosh Meena, Head of Research, Swastika Investmart Ltd, said.

On the international front, key economic indicators like manufacturing PMI data from China and the US, along with US jobless claims, will play a crucial role, Meena said.

However, the dollar index and US bond yields remain the most critical factors influencing the direction of global markets, he added.

Auto stocks will also remain in the limelight this week amid monthly sales data announcement.

"As we step into the new calendar year and month, auto sales data will be closely monitored for initial market cues. In the absence of any significant events, attention is likely to shift toward FII flows and currency movement, especially as the rupee continues to weaken against the US dollar.

These factors could play a crucial role in shaping market direction in the near term," Ajit Mishra -- SVP, Research, Religare Broking Ltd, said.

Last week, the BSE benchmark climbed 657.48 points, or 0.84 per cent, and the Nifty went up 225.9 points, or 0.95 per cent.

Vinod Nair, Head of Research, Geojit Financial Services, said, "Looking ahead, significant market attention is expected for the upcoming Q3 results, which will play a crucial role in shaping market trajectory. Investors are likely to align their portfolios based on pre-Budget expectations.

"Additionally, key data points such as the PMI data for India, the US, and China, as well as US jobless claims, will influence investor sentiment."

The past week was marked by consolidation with bouts of intra-day volatility, an analyst said, adding that FIIs exhibited thin volumes due to the Christmas and New Year holidays, continuing as net sellers.

"The outlook for the market will be guided by major domestic and global economic data such as India's infrastructure output, manufacturing PMI of India, UK S&P global manufacturing PMI, US initial jobless claims," Puneet Singhania, Director at Master Trust Group, said.

"With no significant triggers in the near term, markets are likely to remain range-bound," Siddhartha Khemka, Head -- Research, Wealth Management, Motilal Oswal Financial Services Ltd -- said.