Derivatives expiry is expected to keep stock markets volatile this week despite no major immediate trigger while global cues and overseas capital inflows will continue to steer sentiment, say experts.
Stock markets would keenly await the outcome of the US Fed policy meeting this week which would influence trading sentiment going ahead, say experts.
Apart from RBI policy review, the last batch of June 2016 corporate results, progress of monsoon rains and macro economic data will dictate market trend in the near term, he added.
"Early this week, we may continue to see volatility in Indian markets and some more downside cannot be ruled out completely," Pankaj Sharma, Head of Equities, Equirus Securities.
Inflation numbers, progress of monsoon rains and key global developments, including the US Fed meeting, will lay the pitch for the stock market movement this week, say analysts.
Quarterly earnings from bluechips Lupin and ITC, wholesale inflation data and the outcome of assembly polls in five states will be the key driving factor for the stock market this week, say experts.
Domestic stocks will take cues from the next batch of quarterly earnings from blue-chips, including HDFC and Hero MotoCorp, and investment trends by overseas investors for further direction, say experts.
"Trend in global markets, crude oil prices, Economic Survey, reform measures announcement in upcoming Railway Budget and rupee-dollar movement will dictate trend on the bourses. Indices may remain volatile with positive bias ahead of expiry of February series derivative contract in the week ahead," said Gaurav Jain, Director, Hem Securities.
Other factors that are likely to influence market sentiments in the near term include global market trends, investment by foreign institutional investors (FIIs), the movement of rupee against the dollar and crude oil prices.
Second-quarter earnings from blue-chips such as Infosys, TCS and Reliance Industries and key macroeconomic data -- IIP and inflation -- will dictate the trend of the stock market this week, according to experts.