Trading activity in the domestic equity markets this week will be largely driven by inflation data, trend in global markets, and foreign fund movement, analysts said.

Participants will also monitor developments related to the Adani Group crisis, which has been a major overhang recently, they added.

"...the movement of crude oil, the dollar index, and US bond yields will be other important factors. The institutional flow will be important as FIIs' selling has come down after relentless selling in January," Santosh Meena, Head of Research at Swastika Investmart Ltd, said.

Foreign Institutional Investors (FIIs) offloaded equities worth a net ₹144.73 crore last week.

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This week, the market will be awaiting key inflation data from the US and India for clues on the rate hike trajectory of central banks.

Retail inflation data for both the US and India is scheduled to be announced on Tuesday.

Last week, the RBI hiked the key benchmark policy rate by 25 basis points to 6.5 per cent, citing sticky core inflation.

"The RBI's monetary policy committee (MPC) meeting delivered a smaller rate hike in line with market expectations, which was positively welcomed by investors.

"They have taken a more optimistic view on domestic growth by increasing the GDP forecast, while cautiously keeping CPI inflation at 5.3 per cent for FY24," said Vinod Nair, Head of Research at Geojit Financial Services.

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During such shaky times, investors need to adopt value buying as a strategy. Due to a decrease in valuation near long-term averages, small cap companies are looking appealing over the long term, Nair added.

That apart companies, such as Adani Enterprises, Grasim, Eicher Motors, SAIL, among others, will announce their quarterly results during the week.

Last week, the 30-share BSE Sensex benchmark declined 159.18 points or 0.26 per cent to close at 60,682.70.

Domestic indices ended the week along the flatline with a negative undertone as the market sentiments were hammered by the prospects of policy tightening by the Federal Reserve as a strong job market in the US offers more leeway in enacting stricter policy measures, Nair added.