The domestic equity market would focus on global trends and foreign fund trading activity this week amid lack of any major trigger at home, analysts said.
"This week won't bring any significant cues, so we may see a tussle between bulls and bears. Because the US market is currently experiencing the second wave of selling following the Federal Open Market Committee (FOMC) meeting, its direction will continue to be crucial.
"Due to the fact that FIIs were net sellers for a significant portion of December, institutional flows will be another crucial trigger," said Santosh Meena, Head of Research, Swastika Investmart Ltd.
Ajit Mishra, VP-Technical Research, Religare Broking Ltd, said, in absence of any major event, cues from global indices, especially the US, would remain on participants' radar.
Global banks
Global central banks like the European Central Bank (ECB) and Bank of England (BoE) followed the US Federal Reserve in increasing policy rates and giving hawkish commentary, sending equities tumbling world-wide last week.
Past week, the Sensex declined 843.86 points or 1.36 per cent, while the Nifty shed 227.60 points or 1.23 per cent.
"The Fed startled the market by maintaining its hawkish tone, as investors were expecting a softer approach after the release of better-than-expected inflation numbers. Following the Fed, BoE and ECB raised their interest rate by 50 bps while maintaining their hawkish stance in combating inflation," said Vinod Nair, Head of Research at Geojit Financial Services.
Lack of major triggers will push the domestic market to follow its global peers this week, Nair added.
"Markets are likely to remain in consolidative range due to lack of triggers in the near-term. Also, lower participation from institutional investors due to upcoming year-end holidays would keep the markets lackluster. Though investors would keep an eye on US home sales and GDP (QoQ) numbers to be released this week," Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd, said.