This week will be interesting for a couple of reasons related to the financial markets.

The first would be the impact of rupee dollar exchange rate on FII flows and hence Indian equities.

The second will be the developments in the Euro Zone, especially Spain.

Last week, Standard & Poor's revised the Spanish Banking Sector's economic risk score from 5 (high risk) to 6 (very high risk).

The Nifty and the Sensex could end up two per cent higher over last week's close.

However, expiry in F&O on May 31 is likely to be below last month's 5,189 levels on the Nifty.

It would be interesting to see the behaviour of oil and gas related stocks this week.

Oil India, IOC, ONGC, GAIL and HPCL announce their financials this week and the management's outlook for their businesses would be the most important insight to watch out for.

Also expected are the results of Coal India, NMDC, Tata Motors, SAIL, Sun Pharma, Power Grid, Tata Chemicals and M&M.

Other data expected this week are Q4 GDP data, HSBC purchasing managers and business activity indices, auto and cement numbers.

The 10-year G-Sec is anticipated to be range bound between 8.47 per cent and 8.55 per cent levels.

The RBI is expected to conduct an open market operation of about Rs 10,000-12,000 crore.

Also awaited is an RBI announcement on the new 10-year benchmark G-Sec.

The rupee could rebound to Rs 54.1 levels to a dollar this week.

Investors round the globe are keenly watching Spain. Standard & Poor's last week observed that the impact of Spain trying to correct its economic imbalances (related to realty bubble and private sector leverage) will be higher and more prolonged than previously anticipated.

Though Greece is not expected to move out of the Euro Zone, any news on that front will impact US 10- year treasury yields.

Absence of news on Greece would see an increase of about 20 basis points in US-10 year yields over last week's close.

And the Euro could strengthen to US$ 1.2760 levels to a Euro as a result.

Analysts expect Nymex crude futures to strengthen to US $ 94.5 levels to a barrel.

Finally gold is expected to remain range bound and within two per cent on either side of last week's close of US$ 1571.2 to an ounce.