The trend in the equity market will be guided by a host of factors lined up this week, including inflation numbers, IIP data, and quarterly earnings from IT majors, analysts said.
Global cues, movement of the rupee, Brent crude oil, and foreign funds will also influence Dalal Street this week, they added.
"We have important macroeconomic numbers this week, as our IIP and CPI inflation will be announced on January 12. On the same day, China and the US will also come out with their inflation figures.
"The Q3 earnings season will kick off with IT major earnings this week, including TCS, Infosys, and HCL Tech," said Santosh Meena, Head of Research, Swastika Investmart Ltd.
Last week, the Sensex lost 940.37 points or 1.55 per cent, while the Nifty declined 245.85 points or 1.36 per cent.
The Indian equity markets have begun the New Year on a slightly cautious note, in line with the global markets, continuing the trend visible in December 2022, said Milind Muchhala, Executive Director, Julius Baer India.
For markets, first week of 2023 turns negativeSensex crashes 1.5 per cent, Nifty edges down 1.3 per cent, as FPIs continue their selling
Concerns over inflation and unabated foreign fund outflows played spoilsport for the domestic equity market last week.
Investor risk sentiment took a blow post the release of the Federal Open Market Committee (FOMC) meeting minutes, which indicated further rate hikes in 2023 to tame inflation, said Vinod Nair, Head of Research at Geojit Financial Services.
"This week will mark the beginning of the earnings season and IT majors, TCS, Infosys, HCL Tech, and Wipro, will announce their numbers. On the macroeconomic front, IIP and CPI inflation will be unveiled on January 12.
FPIs begin New Year in sell-off mode; withdraw ₹5,900 cr from equities in a weekFPIs flow to remain volatile amid GDP growth concerns, high global interest rates, and muted earnings expectations in Q3
"Apart from domestic factors, the performance of global markets will remain on participants’ radar," said Ajit Mishra, VP - Technical Research, Religare Broking Ltd.
Among global factors, investors would track inflation numbers of the US and China.
Apurva Sheth, Head of Market Perspectives, Samco Securities, said, "This week, market participants will keenly watch inflation numbers of US and China. With the Fed still maintaining its hawkish tone, the US inflation numbers will be highly significant." "Back home, the result season of Q3 FY23 will kick off with major IT companies reporting their quarterly numbers," he added.