The market is likely to see some consolidation this week after surging to a

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two-month high last week on sustained buying from foreign institutional investors (FIIs).

Experts said global developments and FII behaviour will be watched keenly. However, expectations of some improvement in domestic macro-economic data and anticipations around June quarter results may influence market sentiments. The US market will be closed on Monday on account of Independence Day.

“The market gained significantly last week, mainly on optimism over the Greek austerity plan, and we think the trigger is now factored in. On Monday, the US market will be closed and we expect Dalal Street to shift its focus to macro-economic numbers and June quarter results, which will start pouring in from next week. The manufacturing data announced recently were a bit disappointing,” said Kaushik Dani, head of equities at Peerless Mutual Fund.

There is no major data release in the domestic market this week. Numbers of factory output, monthly inflation and Q1 results of some major companies will be released next week.

Some companies such as HDFC, IndusInd Bank and Goa Carbon will kickstart the earnings season this week. IT bellwether Infosys is scheduled to announce its numbers next week.

“June quarter earnings will be a major trigger for the market. Investors will continue to watch the progress of monsoon rains. Global cues, crude oil prices and FII inflows may have bearing on the market,” brokerage Sharekhan said in a note.

On the global front, the European Central Bank will take a call on interest rates on Thursday. According to median estimates of 54 analysts on Bloomberg, the bank may raise policy rates by 25 basis points due to high inflation. In the US, key data releases scheduled for the week include factory orders and jobless claims numbers, while China will announce its non-manufacturing data.

NYMEX crude for August delivery rose to $94.94 a barrel on Friday compared with $91.16 a barrel in the week-ago period.

Technical charts are hinting that a correction is on the cards. “The journey till 6,050-6,075 levels is likely to be smooth. After a major run lasting seven days, the bulls may take a breather sooner or later. A minor retracement over the next few sessions will do well to cool off the already overbought short-term technical indicators,” said Sadanand Raje, head of institutional sales at PINC Research.

Brokerage Edelweiss Capital advised investors to wait and buy stocks if Nifty falls below 5,500 mark.

“Now that the benchmark has galloped nearly 10 per cent from the bottom of 5,196 to the top of 5,706 in two weeks, it is necessary that a correction occurs, both time-wise and price-wise, which will prepare Nifty for the next rally. A correction till 5,470, where both 20-day and 34-day moving averages are placed, would be ideal. We would advise fresh buying only on dips, preferably below 5,500 with a strict stop loss of 5390,” the brokerage said in a note.

Sensex gained 522.12 points, or 2.86 per cent, last week to close at 18,762.80. Nifty rose 155.75 points, or 2.85 per cent, to end the week at 5,627.20.