Lacklustre quarterly earnings, coupled with an expected status quo on the monetary policy by the central bank, might lead to subdued market conditions in the week starting April 6.
"Though the markets have factored in that the fourth quarter results will be subdued, further investments would only take place depending on the outlook given by the companies. The Indian markets are in a situation where earnings need to catch up with the expectations of the investors," Devendra Nevgi, chief executive of ZyFin Advisors, told IANS.
"The language that the RBI (Reserve Bank of India) uses in its outlook statement would also be another key trigger for the markets. Global issues like the financial outcome in Greece would also be of key interest to the Indian markets," Nevgi added.
The major triggers for the markets in the coming week will be the concerns regarding the marginal increase in retail inflation for February which belied expectations of a rate cut in the RBI's first monetary policy review for 2015-16.
The RBI is scheduled to announce its first bi-monthly policy review for 2015 on April 7.
Another trigger in the coming week will be the lower expectations on Q4 earnings and a negative return of -7 percent in March.
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According to Dipen Shah, head of private client group research, Kotak Securities, the Indian markets may continue to be dictated by global factors as the quarterly results are also expected to be subdued.
Action on the fiscal or monetary front, if any, can give the market some upside, Shah added.
"We remain positive on the medium- to long-term prospects of the markets based on our expectations of further fiscal reforms and a pick-up in the economic growth over the period," Shah added.
Gaurang Shah, vice president, Geojit BNP Paribas, expected the markets to be range bound with visible impact of Q4 earnings on the stocks.
"On the credit policy, we don't expect any rate cut to come through and markets will be keen to listen to the RBI governor's views of local & global economies and the financial markets," Shah added.
"The fact that we are witnessing unseasonal rains at such time which is very critical from cutting and harvesting point of view, the fear of food inflation creeping up can't be ruled out since the damage is very extensive; this may also limit the rate cut expectation any time soon."
Shah further said that volatile markets in the US, Europe and Asia, coupled with a ramp-up in crude due to the Yemen unrest, will be other triggers for Indian markets.
Another key factor that the Indian markets will observe closely is that the US economy added only 126,000 jobs in March, falling short of economists' expectation of 245,000 and the unemployment rate held steady at 5.5 percent.
This increase in employment marked the first time the monthly job growth was below the key 200,000 benchmark, which was typically associated with a strengthening job market, over the past year.
The slowdown in job creation might prolong the US Fed's rate hike plans. This will be positive for the Indian markets as lower interest rates in the US will keep foreign portfolio investors in emerging markets such as India.
Meanwhile, the benchmark 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE) gained 801.55 points or 2.91 percent during the weekly trade session ended April 1.
The Sensex had ended the truncated weekly (April 1) trade session at 28,260.14 points. For the previous weekly trade ended March 27, the BSE Sensex had closed at 27,458.64 points.
The Indian markets were closed on April 2-3 on account of Mahavir Jayanti and Good Friday.