Investor sentiment in the stock market this week may not be as upbeat as it was last week, when the GST Council announced a major rejig of the tax structure in the country, slashing rates of over 400 items and axing down two tax brackets of 12 per cent and 28 per cent.
Analysts say focus will remain mostly on global trends, trading activity of foreign investors and inflation data instead.
"This week will be data-heavy both domestically and globally. On the domestic front, August inflation data (September 12) will be closely tracked, while globally, key US data releases including consumer inflation, jobless claims, and consumer sentiment, will be critical in shaping Fed policy expectations and influencing flows,” said Ajit Mishra, SVP, Research, Religare Broking Ltd.
“Additionally, any updates on the India-US trade deal could provide further support to market sentiment," he added.
Last week, the BSE benchmark jumped 901.11 points or 1.12 per cent, and the Nifty climbed 314.15 points or 1.28 per cent. This surge was supported by strong domestic macroeconomic data and policy reforms.
Also Read: GST Council meeting, macro data to drive stock markets this week
The week ahead will register a cautiously optimistic mood, said Pravesh Gour, Senior Technical Analyst at Swastika Investmart Ltd.
"Investors may particularly focus on consumption-driven and capital expenditure-linked sectors. Nonetheless, continued caution is warranted amid evolving Fed guidance and the still-sensitive international trade outlook," he said.
Movement of crude oil prices and the rupee-dollar trend would also be important markers that dictate market trends during the week.
The next major event for the markets is the upcoming US Federal Reserve policy meeting on September 16-17.
"Key macro data this week includes Indian and US inflation, ECB (European Central Bank) interest rate decision and Japan's Q2 GDP," opined Siddhartha Khemka, Head Of Research, Wealth Management, Motilal Oswal Financial Services Ltd.
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