Movement of Indian rupee against the US dollar, macroeconomic data and investment trend of foreign funds would largely dictate trend in the stock market this holiday-shortened week, say experts.
Stock markets would remain closed on Monday for Ganesh Chaturthi.
Data for industrial production and consumer price index (CPI) for July would be announced on Thursday.
"Inflation and IIP data shall be coming and market is likely to witness high volatility. Going ahead, RBI's monetary policy is due on September 20 and chances of rate cuts are very less, considering the pressure on the rupee. Global news and markets shall be closely watched for market cues," said Rakesh Goyal, Senior Vice President, Bonanza Portfolio.
Besides, marketmen would also watch crude oil price movement amid the ongoing unrest in Syria.
"Looking broadly at the market's fundamental setup, the falling USD/INR rates are favourable and now marketmen would keep an eye on the movement of crude oil," said Nagji K Rita, Chairman & MD, Inventure Growth and Securities.
Meanwhile, the rupee continued to strengthen against the dollar and closed at 65.24 on Friday, the highest level in almost two weeks.
Raghuram Rajan, who took over as RBI chief on Wednesday, had announced steps to attract dollar inflows, including enhanced limits for exporters to re-book cancelled forward exchange contracts and a window to swap foreign currency deposits.
The BSE Sensex last week gained 650.34 points to 19,270.06.
Analysts said markets are likely to remain volatile in short-term amid concerns over Syria, the US Federal Reserve's FOMC meet due later in the month and RBI monetary policy review.
There is also rising speculation that the government will hike diesel prices.
Meanwhile, jobs data in the US came below expectation on Friday.