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Rising Covid-19 cases as well as derivatives expiry and key macro-economic data points will impact the Indian equity market's trajectory during the upcoming week, opined experts.


Besides, flow direction of foreign funds along with crude oil prices will also influence investors' sentiments.

"On daily charts, Nifty has formed a 'Bearish' engulfing pattern. A move below Friday's low, i.e., 16,909 could result in faster fall in the coming week which also may see low volumes as most institutional players are on year end leave," said Deepak Jasani, Head of Retail Research, HDFC Securities.

"However an upward breach of 17,118-17,155 could result in better momentum on the upside."

Notably, market participants are expected to track macro-data such as the Index of ECI (eight core industries) and fiscal deficit numbers which will be released during the trade week starting December 27.

"Indian market post the recent pullback, recouped some of the losses amidst volatility and ended almost flat," said Siddhartha Khemka, Head - Retail Research, Broking & Distribution, Motilal Oswal Financial Services.

"While the relief rally might continue for some more time, volatility also cannot be ruled out on account of potential risk from the Omicron variant and fragile global cues."

Furthermore, derivatives expiry on December 30, Thursday will be the other major theme for the week starting Monday.

"We have a lack of global cues amid Christmas and New Year holidays and FIIs' flows are also on the tepid side where December month F&O expiry and domestic cues will dominate the next week," said Santosh Meena, Head of Research, Swastika Investmart.

"On the domestic front, rising Covid cases and various restrictions by the state governments are a key concern for the market."

Further, Meena points out that FIIs' volumes have come down significantly, however, they are still on the sell-side.

Last week, FIIs sold equities worth Rs 6,600 crore, while DIIs bought worth Rs 6,900 crore in the cash market.

According to Vinod Nair, Head of Research at Geojit Financial Services: "The Indian market has been undergoing a phase of consolidation for the past two months, which we believe is reaching its last phase in terms of price correction.

"Going forward, the market will continue to remain highly sensitive to developments surrounding the Omicron variant while closely monitoring macroeconomic data like the US jobless claims to be released next week."