Domestic macroeconomic data announcements, global trends and trading activity of foreign investors would guide market sentiments this week, analysts said.

After a record rally, markets may face volatile trends this week amid elevated valuations and investors would also keep a track of global oil benchmark Brent crude and rupee-dollar movement for further cues.

"Potential volatility in the stock market is anticipated this week. Elevated valuations remain a concern, with investors now focusing on monsoon progress and its impact on the rural economy. The upcoming Union Budget in July has become the next focal point, with high expectations for growth-oriented policies," said Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd.

Market sentiment will be gauged by closely monitoring foreign and domestic institutional investors' activity (FII and DII) and crude oil prices, he said.

On the global front, the US market has experienced some profit-booking from higher levels. Key economic data, such as the US job openings report, will be released on July 2, 2024, followed by the US ISM Services PMI data on July 3, 2024, he noted.

"Additionally, the US Federal Reserve Chairperson Powell's speech is scheduled for July 2, 2024, and the US FOMC (Federal Open Market Committee) minutes will be released on July 3, 2024. The movement of dollar index and US bond yields will also be crucial factors to watch," Gour added.

Last week, the BSE benchmark jumped 1,822.83 points or 2.36 per cent, and the Nifty climbed 509.5 points or 2.16 per cent.

The Sensex recorded the best monthly gain in June by climbing 7.14 per cent.

The Sensex breached the historic 79,000 mark on Thursday, and the Nifty hit the 24,000 level for the first time in intra-day trade.

"The outlook for the market will be guided by major domestic and global economic data such as HSBC India Manufacturing PMI, HSBC India Services PMI, S&P Global Manufacturing PMI, Fed speech, initial jobless claims this week," Arvinder Singh Nanda, Senior Vice President, Master Capital Services Ltd, said.

After hitting a fresh all-time high level in early trade on Friday, the BSE 30-share index declined 210.45 points or 0.27 per cent to settle at 79,032.73. During the day, it jumped 428.4 points or 0.54 per cent to hit a record peak of 79,671.58.

The Nifty went lower by 33.90 points or 0.14 per cent to 24,010.60. During the day, it climbed 129.5 points or 0.53 per cent to hit a new lifetime high of 24,174.

"We expect this positive momentum to continue at a steady pace with stock-specific action. However, the release of economic data points this week would keep a little volatility in the market. Sector like auto is expected to be in the limelight with release of their monthly sales number," said Siddhartha Khemka, Senior Group VP, Head - Research, Broking & Distribution, Motilal Oswal Financial Services Ltd.

As the new month begins, market participants will closely watch auto sales data to start with, said Ajit Mishra – SVP, Research, Religare Broking Ltd.

"Besides, progress of monsoon will also be in focus. Global cues, especially from the US, indicate a supportive outlook, with major indices continuing their upward trend despite intermittent consolidation," he said.

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