Outcome of Greece's elections and the RBI's policy stance will decide the direction of bourses this week.
Stocks are expected to show high volatility and market-men are expecting stocks to shed value. However, any positive surprise could take the Nifty and the Sensex up by up to four per cent this week.
Growth in advance tax (10 per cent) for Q1 of FY13 indicates better than expected first quarter results from India Inc.
Combine this with a normal monsoon and suddenly it has the ability to ease inflation.
RBI's policy stance on Monday is extremely significant as the regulator is torn between high inflation and growth imperative.
A rate cut would see 10-year G-Sec prices rallying and yields shedding up to 25 basis points.
The benchmark 10 yr G-Sec could trade in the range of 8.10 per cent and 8.20 per cent levels this week.
If rates remain untouched, yields could move up by 20 basis points and trade between 8.50 per cent and 8.60 per cent levels.
Expect the rupee to strengthen against the dollar and breach 54.50 levels to a dollar this week.
Globally, election results in Greece, political turmoil in Syria and the G-20 meet in Mexico are the events to watch out for this week.
It would be interesting to note the reaction of the G-20 leaders in case Greece decides to opt out of the Euro Zone.
Even before that, Euro Zone is faced with a new bailout candidate, Cyprus. If Greece decides to leave the Euro Zone, Cyprus' banks might have to forget about their loans to Greek banks. Its banks had already lost about €4 billion when Greek government debt was recast.
Whether Greece the country will emulate its football team (which recovered from the bottom of the points table to reach Euro 2012 quarter finals eliminating Russia) remains to be seen.
This week is a make or break week for the currency, Euro. Positive news from Greece will take the currency towards $ 1.2850 levels to a Euro this week.
Yield on US 10-year treasury could strengthen and breach 1.70 per cent this week.
Nymex crude futures are likely to strengthen and hover in the range of $ 87-88 to a barrel this week.
Finally gold is expected to remain range bound within $ 1580 -1630 to an ounce.