Macro economic cues such as domestic industrial production numbers and monthly inflation data

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coupled with factory output numbers from largest European economies — Germany and the UK, may give some direction to the market this week. However, Bank of Japan’s money policy review on Monday may be more keenly watched as there would be no trading on the US markets, later in the evening, on account of Labour Day.

“We are a bit positive on the market but believe it will stay in a tight range going forward. Nifty will find it difficult to breach 5,500 levels at least for the first two or three trading days. Industrial numbers may influence market. After Wednesday, we could see some profit booking. Japanese money policy will be tracked as yen is hovering at 15-year highs against dollar on Chinese buying of Japanese bonds. Germany’s numbers will be strong but may not impact markets. Same is the case with UK’s numbers,” said head of research at Geojit BNP Paribas Financial Services, Alex Mathews.

“After some correction in the week before the previous one, we witnessed some buying interest on good set of numbers on the economic front. Industrial production numbers and inflation figures may have some immediate impact. Japanese economy would be better off if there policy makers come out with fiscal rather than money policy. Our market may soon begin waiting for September quarter results, which would cast a small glimpse in the advance tax numbers to be out on September 15,” said whole-time director at Arihant Capital Markets, Anita Gandhi.

Gandhi expects oil and gas stocks to give decent returns going forward.

The rate of inflation for food articles for the week ended August 21 jumped to 10.86 per cent against 10.05 per cent in the previous week.

“Meanwhile, rice stocks such as Kohinoor Foods and KRBL could be watched as the largest exporter of rice, Pakistan, has been witnessing floods,” Mathews added.

Some pressure from inflation numbers could be seen on markets amid concerns the Reserve Bank of India could raise key rates to curb inflation.

Food inflation may continue to remain high on firm prices of milk and related products amid Ramadan days.

Sensex rose 224.40 points, or 1.24 per cent, last week, to end at 18,221.43. The 50-stock index advanced 70.70 points, or 1.31 per cent, to 5,479.40.

“We expect the Nifty to make steady advances in the coming days. Resistance is expected in the 5,650 area on the upside. The Midcap index too has returned to its bullish tendencies. Technicals suggest that a bullish break out is possible,” said PINC Research in a note.

The put-call ratios of Beml, Shriram Transport Finance and Axis Bank for the near-month expiry, on Friday, stood 1.80, 1.67 and 1.12, respectively, reflecting bearish sentiments on the counters.