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As the Indian stock market remains largely bullish with intermittent correction and consolidation, wholesale inflation data, global cues along with the trend in the foreign institutional investments (FII) will drive the domestic indices in this week, analysts said.
Siddhartha Khemka, Head of Retail Research, Motilal Oswal Financial Services noted that post the sharp rally after the budget, the Indian equity market saw some consolidation in the week ended Friday, although it ended on positive note.
Global cues were mixed as prospects of higher US fiscal stimulus and larger vaccine rollouts globally, along with dovish Federal Reserve outlook kept the overall mood positive, he
said.
"Going ahead, with the earnings season largely over, global cues will dictate the short-term market trend. Market would react to the key macro data -- IIP, CPI and WPI data," Khemka said.
The Wholesale Price Index for January, which shows the wholesale inflation rate, will be released on Monday.
Lower food prices, especially those of vegetables and cereals, brought down India's sequential retail price inflation in January 2021. The Consumer Price Index (CPI) released on Friday declined to 4.06% from 4.59% reported for December 2020.
Further, the Index of Industrial Production (IIP) for December released on Friday showed that the factory output grew by 1% in December 2020 from a contraction of (-) 2.09% in November and rose to 0.4% during the corresponding month of the previous year.
Favourable base effect, along with a broad-based rise in production across sectors, accelerated India's industrial activity in December.
Motilal Oswal's Khemka added that next week, European Central Bank's monetary policy will also be eyed along with India's trade balance data.