Factors that will drive the markets this week

Macroeconomic data announcements, global trends and trading activity of foreign investors would guide momentum in the equity market this week, analysts said.

Markets ended a five-week losing streak and gained nearly a per cent last week, helped by a sharp rebound on Friday.

Last week, the BSE benchmark jumped 500.65 points or 0.77 per cent and the Nifty gained 169.5 points or 0.87 per cent.

"On the global front, problems in China's real estate, fluctuations in the dollar index, and the US bond yields will play a pivotal role in shaping market dynamics throughout the week.

"Apart from that, macroeconomic data like the S&P Global services PMI, US jobless data will provide insights into the FED's monetary policy outlook," said Pravesh Gour, senior technical analyst, Swastika Investmart Ltd.

The domestic PMI (Purchasing Managers' Index) data for the services sector will be announced on Tuesday.

"On the macro front, some of the key factors that will be in focus in the coming days are India's S&P global services PMI, Euro zone S&P global composite PMI, UK services PMI, Euro Zone Q2 GDP, US factory orders, S&P Global US services PMI, crude oil prices, initial jobless claims, FII (Foreign Institutional Investors) and DII (Domestic Institutional Investors) activities will drive the market," Arvinder Singh Nanda, senior vice president, Master Capital Services Ltd, said.

In the absence of any major triggers from the domestic market, sentiments will be driven by global cues, including the release of US payroll and PMI data, said Vinod Nair, head of research at Geojit Financial Services.

Besides, movement of crude oil and trend in rupee against the US dollar will also influence trading patterns in the market.

"After a sluggish to negative sentiment last month, foreign investors could be looking at Indian markets with fresh optimism once again, as the nation continues to overcome global economic challenges and perform well on most economic parameters.

"While foreign investors have already been net buyers of local shares in the past five sessions, the recent macroeconomic numbers like strong Q1 GDP growth, robust August GST collections, and upbeat PMI data for last month should bolster their confidence in local markets," said Shrikant Chouhan, head of research (retail), Kotak Securities Ltd.

Manufacturing activities in India gained momentum in August as new orders and output increased at the quickest rates in nearly three years, according to a survey released on Friday.

GST collections grew by 11 per cent to over Rs 1.59 lakh crore in August on the back of improved compliance and reduced evasion, with experts forecasting higher mop-up to continue in the upcoming festive season.