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RBI's upcoming monetary policy review along with the release of key macro economic data points will steer the key equity indices next week.

Moreover, direction of foreign fund flows, as well as concerns over Covid-19's new variant Omicron's impact on growth will influence investor sentiments.

The monetary policy review is slated for December 6-8. It is widely expected that RBI's MPC will maintain a status-quo in the key lending rates.

At present, the MPC of the central bank has maintained the repo rate, or short-term lending rate, for commercial banks at 4 per cent.

Consequently, the reverse repo rate was kept unchanged at 3.35 per cent.

"Investors on Monday (December 6) would react to the release of US non-farm payroll data over the weekend, while keeping an eye on RBI's policy decision due next week wherein status quo is likely to be maintained," said Siddhartha Khemka, Head, Retail Research, Broking & Distribution, Motilal Oswal Financial Services.

"We recommend investors to continue to buy on dips strategy, as the uncertainty is likely to continue for the time-being, while the long-term fundamentals remain intact," Khemka added.

Besides, the retail inflation gauge of Consumer Price Index (CPI) for November will be released next Friday. The Index of Industrial Production (IIP) for October will also be released.

"Major domestic data points awaiting their release in the coming week are November's inflation data, which is expected to remain elevated, and October's industrial and manufacturing production data," said Vinod Nair, Head of Research at Geojit Financial Services.

On technical levels, Deepak Jasani, Head of Retail Research, HDFC Securities, cited that weekly charts show a 'doji' like formation which suggests that the recent down-move may be close to an end for the time-being.

"We may see some consolidation or upward bounce for the next few sessions. On upmoves 17,536-17,613 could act as a resistance while 16,722-16,782 could act as a support on a weekly basis," Jasani said.

In addition, FIIs' behaviour will play a critical role in the direction of the market, said Santosh Meena, Head of Research at Swastika Investmart.

Last week, FIIs sold equities worth Rs 15,800 crore in the cash market.

"However, DIIs provided good support to the market by handsome buying worth Rs 16,500 crore in the cash market," Meena said.