Global trends, trading activity of foreign investors and domestic macroeconomic data announcements would dictate terms in the equity market in a holiday-shortened week ahead, analysts said.
Equity markets would remain closed on Wednesday for Mahatma Gandhi Jayanti.
"Looking ahead, it will be interesting to monitor Foreign Institutional Investors (FIIs) and their flow into India. September saw the highest FII inflows into Indian equities this year. Movements in commodity prices, the US dollar index, and key macroeconomic data from the US will also be pivotal in shaping the market's direction.
"Additionally, geopolitical developments will continue to be a key factor on the global stage," said Santosh Meena, Head of Research, Swastika Investmart Ltd.
On the domestic front, upcoming monthly auto sales data and quarterly updates from companies could drive stock-specific movements in the near term, Meena said.
Among macroeconomic numbers, PMI (Purchasing Managers' Index) data for the manufacturing and services sectors would influence trading in the markets.
"We expect the positive momentum to continue in the market driven by frontline stocks," said Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services Ltd.
Last week, the BSE benchmark jumped 1,027.54 points or 1.21 per cent while the Nifty surged 388 points or 1.50 per cent.
The BSE Sensex hit a new record intra-day peak of 85,978.25 on Friday. The NSE Nifty also hit an all-time intra-day high of 26,277.35 on that day.
Going ahead, global factors will play a pivotal role, especially with the absence of any major domestic events, Ajit Mishra – SVP, Research, Religare Broking Ltd, said.
"Auto sales data, set to be released from October 1, will be a key focus, along with important economic indicators such as HSBC India Manufacturing PMI and HSBC India Services PMI. Additionally, trends in foreign fund flows and crude oil price movements will be closely watched, as they could influence market sentiment," Mishra said.
Vinod Nair, Head of Research, Geojit Financial Services, said, "Looking ahead, investors will be focusing on the Q2 earnings, with an anticipation of an improvement in earnings outlook." The market responded positively to the Fed's rate cut and stable economic data points, which accelerated foreign inflows and generated momentum in domestic markets, Nair said.
Additionally, China's economic stimulus announcement has bolstered investor confidence, resulting in notable positive momentum in global markets, particularly within Asian indices, he added.
Except for the headline, this story has not been edited by The Telegraph Online staff and has been published from a syndicated feed.
