NEW DELHI: After the rally last week, which was driven by global cues, local events may take centre stage this week, as coronavirus cases race towards 10,000 mark despite strict lockdown measures. There are hopes of an economic stimulus package, and any announcement on that front may have an impact on Dalal Street.

Along with that, inflation numbers and RBI minutes will also shape the market movement. “There is expectation that the worst affected sectors and MSMEs may get some relief in another package to be announced shortly.

The market will continue to fluctuate based on news coming out, regarding the spread of infections and any lifting of lockdown in India,” said Vinod Nair, Head of Research at Geojit Financial Services. Going by the buzz on Dalal Street, the following factors may guide market ahead:No end to lockdownIndian policymakers indicated that the country will most likely extend the ongoing lockdown by two more weeks.

Prime Minister Narendra Modi in a video conference with chief ministers discussed the roadmap ahead even as the number of cases rose sharply to over 8,000. An extended lockdown will mean virtually no business for most of the companies and this could severely impact their cash flows. Economic package in the offing?Dalal Street was rife with speculations of an economic package for Indian businesses from the government.

Reports claimed the economic stimulus package would be bigger than the Rs 1,70,000 crore worth of schemes announced by Finance Minister Nirmala Sitharaman last month that focussed on providing food security to the poor and providing money in their hands. If the government brings out ithis package this week, businesses will take a sigh of relief and in turn share market may see a big movement. Rupee keeps fallingDespite numerous attempts by the Reserve Bank of India to stem the freefall in the Indian currency against the US dollar, there was no end to the pain.

The currency pair is trading close to its record lows of 76.55. Sugandha Sachdeva VP-Metals, Energy - Currency Research, Religare Broking said the rupee has again rolled on the downwards trajectory amid continued economic uncertainty and fragile investor sentiment, due to growing concerns of coronavirus led economic slowdown. “Further exerting pressure on the local unit has been the hardening dollar index, persistent foreign fund outflows and retreat in oil prices from multi-year lows.

The local unit has breached the crucial support of the 76.25 level, and now seems primed to test further lows of around 77.50 mark in the coming days,” she added. Sharp drop in VIXIndia VIX, also known as the fear index, has come down sharply in the last week.

The index is now below psychological 50-mark, implying traders are expecting relatively lower volatility going ahead. “Any negative surprises with respect to the lockdown will also have an impact on the bourses.

Additionally, it would be sound for investors and traders to keep a watchful eye on India VIX.

If VIX falls below 30 level, it would be a good starting point to go long and accumulate stocks, said Jimeet Modi, Founder - CEO, SAMCO Securities - StockNote. Will the rally in pharma continue?Pharma stocks were in focus in the holiday-shortened week, as the pharma index rallied sharply.

“As this sector remained undervalued for the longest period of time, this week’s rally has brought the index to comparatively fair valuations.

However, investors should not jump the gun and should stay away from this space for now as pharma is a crowded trade and situations can change very quickly,” said Modi. Inflation dataIndia will also release retail and wholesale inflation data for March early this week.

Many economists expect retail inflation to ease from 6.58 per cent in February due to drop in demand.

A fall in inflation will make the task easy for RBI to deliver another much-needed rate cut.

There are also concerns on Street that due to the lockdown quality of the data may be impacted. Another market holidayThe market will be shut on Tuesday on account of Ambedkar Jayanti, marking another truncated trading week.

Banks in many states will also be closed to mark the occasion. Technical outlookNifty formed a bullish candlestick during the week with broader market participation, positive market breadth and closed almost 20 per cent off recent lows. “However, we assume the ongoing rally is a bear market rally and is least likely to be sustainable.

In fact, the market may witness strong resistance at the cluster of Fibonacci retracement of 38 per cent at 9,300-9,400 on Nifty.

Going ahead, we have a mildly positive outlook for the next week with the support and resistance placed at 7,900 and 9,400, respectively,” said Modi.