Global trends, trading activity of foreign investors, inflation to drive markets this week: Analysts

New Delhi: Sentiment in the stock market this week will be guided by global trends, trading activity of foreign investors and inflation data, according to analysts.

Markets ended last week on a firm note, with the benchmarks surging more than one per cent, supported by strong domestic macroeconomic data and policy reforms, an expert said.

"This week will be data-heavy both domestically and globally. On the domestic front, August inflation data (September 12) will be closely tracked.

"Globally, key US data releases, including consumer inflation, jobless claims, and consumer sentiment, will be critical in shaping Fed policy expectations and influencing flows. Additionally, any updates on the India-US trade deal could provide further support to market sentiment," Ajit Mishra, SVP, Research, Religare Broking Ltd, said.

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.

"Looking ahead, Indian equities are likely to enter the week on a cautiously optimistic note. 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," Pravesh Gour, Senior Technical Analyst at Swastika Investmart Ltd, said.

Movement of crude oil prices and the rupee-dollar trend would also dictate market trends during the week.

"This week is set to be crucial for Indian markets, with the recent GST rate cut announcement acting as a potential stimulus that could lift sentiment and trigger sectoral rallies, countering the negative sentiment of tariffs in the near term," Puneet Singhania, Director at Master Trust Group, said.

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," Siddhartha Khemka - Head Of Research, Wealth Management, Motilal Oswal Financial Services Ltd, said.