Profit booking or another record high in Nifty this week? Track these 5 factors

"There is a mix of anxiety and excitement in the market due to the muted Q1FY25 earnings forecast and the expectation of a growth-oriented budget. On the other hand, the guidance of a strong GDP for FY25 evoked investor sentiment," said Vinod Nair, Head of Research, .

Here are key factors to track this week:

1) Budget expectations
The budget is expected to maintain the fiscal deficit and borrowing targets the same as the February interim Budget.

"There could be some positive announcements on allocations towards rural economy. Also, tax benefits for the lower income brackets may be possible. Focus on capital expenditure is also expected to continue with increasing central expenditure, persuading state-level capex, and incentivizing private capex. Overall, we are likely to see policy continuity," said Nimesh Chandan, CIO, Bajaj Finserv Asset Management.

2) Earnings
As the Q1 earnings season picks up pace, various companies like RIL, Jio Financial, Asian Paints, Wipro, Kotak Mahindra Bank, YES Bank, and Paytm will release their numbers during the week, leading to stock reactions.

3) FII flow
As the June quarter earnings season began last week, FII inflow into Dalal Street crossed the Rs 15,000 crore mark in June with analysts predicting that better-than-expected results of IT majors can attract more inflow.

"FII flows will continue to be erratic, influenced by global factors. Better-than-expected results from IT majors who have come out with results so far indicate potential for FII buying in these stocks where valuations are not excessive," Dr VK Vijayakumar of Geojit Financial Services, said.

4) Macro watch
Economic data like China's GDP, EuroZone CPI inflation, ECB policy, and the US Fed chair speech will be watched carefully by investors to get cues on market momentum.

5) Technical factors
On the daily chart, prices are gradually inching higher with a series of small body candles observed within a range. Throughout the week, dips were bought, and the 24,150-24,200 zone acted as a strong support for the bulls. Conversely, the resistance around 24,450-24,500 was broken due to strong buying in the IT sector on Friday, said Rajesh Bhosale, Equity Technical Analyst, Angel One.

"For the Nifty, close attention needs to be paid to the 24,200-24,150 zone. If this level is breached, it could signal the first sign of weakness, possibly reaching 24,000 and below ahead of the budget," he said.