Quarterly earnings, inflation data and the much-awaited U.S.-China trade deal signing would drive the equity markets this week, according to analysts.
"Market wants to look forward where third quarter earnings and pre-Budget movement will be the theme of this week. In terms of earnings, Wipro, IndusInd Bank, Reliance Industries, HCL Technologies and HDFC Bank will be key companies that will post their Q3 results this week," said Santosh Meena, Senior Research Analyst, TradingBells.
He added that Infosys shares may react positively on Monday after the company's audit committee gave a clean chit to the management on allegations of misconduct.
Infosys on Friday said the board's audit committee has completed the independent probe into the anonymous whistleblower allegations and found "no evidence" of financial impropriety or executive misconduct.
The IT services major reported a 23.7 percent rise in consolidated net profit at Rs 4,466 crore for the December quarter. The earnings were announced after market hours on Friday.
"Markets will first react to IT major Infosys results in the early trade on Monday. Meanwhile, volatility would remain high on the stock-specific front due to prevailing earnings season and global uncertainty," said Ajit Mishra, VP - Research, Religare Broking Ltd.
Among macroeconomic data announcements, retail and WPI inflation numbers will be released on Monday and Tuesday, respectively. On the global front, with US-Iran tensions cooling off, focus will largely shift to the upcoming US-China trade deal signing.
Kotak Mahindra Asset Management Company, Senior VP and Head of Equity Research, Shibani Kurian said, "From here on, the equity markets would focus on the upcoming Union Budget and also RBI policy at the start of February. Markets would also take cues from the Q3 FY20 earnings season with key focus being on management commentary on business outlook." Markets would on Monday may also react to industrial production data which was announced post market hours on Friday.
The country's industrial output grew 1.8 percent in November, turning positive after three months of contraction, on account of growth in the manufacturing sector.
"Markets are heading for testing times given that the result season has set in and Budget parleys too will have to be digested in weeks to come. Volatility is expected to increase, although prices are not expected to move much till Budget. However, sector specific rallies are likely to continue," Jimeet Modi, Founder & CEO, SAMCO Securities & StockNote said.
During the last week, the Sensex advanced 135.11 points or 0.32 percent.
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