Domestic, global macro data hold key for stocks this week

Stock market trends this week will largely depend on domestic as well as global macro economic data prints, while expectation of tax sops in budget and weakness of dollar may add to the positive sentiment for the year ahead, experts say.

Foreign investors will continue to be net sellers and the holiday spirit is expected to keep the market muted on account of less volume on the FII counter.

Meanwhile, cash crunch is likely to ease from this week, and this can translate into some recovery in the short-term in the equity markets, experts believe.

"FIIs continuing to be net sellers in equities failed to deter investors chasing stocks higher as index futures' stellar rise bolstered sentiments that approaching union budget and end to note ban period could lead to relief measures," Anand James, Chief Market Strategist, Geojit BNP Paribas Financial Services said.

For the week ended December 30, the Nifty sustained above the key level of 8,000. The Sensex and NSE Nifty recorded a rise of 585.76 points, or 2.24%, and 200.05, or 2.50%, respectively.

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"This being a pivotal level for the market gives clear indication that it bulls who are in full control for the market this week," Rohit Gadia, Founder & CEO, CapitalVia Global Research said, adding that "staying above this level we expect the market to stay strong and recovery to find momentum going forward".

The important macro economic data for this week will be Nikkei Manufacturing PMI and Nikkei Services PMI. While, globally oil inventories data, US job data and FOMC meeting minutes due on Wednesday would be major events that might set the market trend.

"Going ahead, demonetisation will keep hovering on the market gains. As the disruption caused in Indian economy sentiments are likely to take two to three quarters to turn back," Abnish Kumar Sudhanshu, Director & Research Head, Amrapali Aadya Trading & Investments said.

He further added there is high expectation from upcoming union budget 2017-18 and sector wise, infrastructure, IT and pharma would remain main focus areas next year.