The results of market dominants, such as Reliance Industries, Larsen & Toubro and TCS,

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due to this week, will ensure choppiness to stay in the market going forward.

Global cues such as the GDP and factory output numbers from the world’s largest exporter of metals, China, could influence metal counter. The Chinese central bank raised lenders’ reserve requirements by 50 basis points on Friday.

“The earnings of top Indian firms this week may dictate the future path of Indian markets. FIIs activity and developments in the external environment may also have some impact on the Indian markets,” wrote Gaurav Dua, head of research at Sharekhan, in a note.

High inflation rate will remain among the key concerns for the investors as a majority of market participants fear the central bank may raise key rates in its upcoming money policy meet on January 25.

Thus banking stocks could be impacted.

DD Sharma, head of research, at Anand Rathi feels that the central bank should not follow money policy measures for now, hike in food inflation is seasonal in nature and it could gradually come down when the supplies are restored.

“Food inflation is fuelling the overall inflation. Because, rise in the inflation is due to shortages in food supplies, we believe it is seasonal and hence may not influence the central bank’s stance to much extent in the next few quarters. Among the banking stocks, we prefer SBI, Union Bank and ICICI Bank, as these scrips are available at cheap valuations,” said Deven Choksey of KR Choksey.

After lower-than-expected results and Q4 outlook from IT bellwether Infosys, some doubts have raised on the December quarter corporate earnings.

Wipro, HCL Tech, PNB, Yes Bank, Axis Bank, GAIL, Bajaj Auto, JSW Steel, and ITC are some of the prominent companies, which will post third quarter results this week.

“Fear of anti-inflationary measures and threat to co-operate profitability is pushing down the market,” said Raamdeo Agrawal, co-founder and director at Motilal Oswal Financial Services.

Market participants are largely expecting the central bank to hike policy rates by 25 basis points.

“Overall, we expect inflation to remain the Reserve Bank of India’s top policy priority. The upward revision in October WPI inflation to 9.12 per cent from 8.58 per cent suggests that price pressures are building, but had not been reported earlier. We expect a 25 basis points hike of policy rates on 25 January and a hawkish RBI to hike a further 75 basis points through FY12,” said Sonal Verma and Ketaki Sharma, economists at Nomura India wrote in a note.

Meanwhile, the BSE Sensex plunged 831.37 points, or 4.22 per cent, last week, to close at 18,860.44. The Nifty index on NSE tumbled 249.60 points, or 4.23 per cent, to settle at 5,654.55.