The Reserve Bank's monetary policy review this week will dictate the near-term trend on the bourses, say experts.
Besides, auto stocks will be in focus as companies from this sector will report sales data for March starting Tuesday.
The RBI will undertake its policy review on April 1, 2014 with analysts widely expecting the apex bank will keep interest rates on hold.
"We have some major events and data lined-up and their outcome would play the decisive role in the market movement. The most crucial is the RBI's policy review. Auto numbers and HSBC PMI data will also hold significant importance," said Jayant Manglik, President-retail distribution, Religare Securities Limited.
Brokers said trends in investment by foreign institutional investors (FIIs) and movement of rupee against the dollar will also hold key for the domestic equities.
"With both IIP and WPI numbers turning out to be favourable, our economy is gearing up for a strong come-back from the prolonged financial crisis. Markets are keenly awaiting the general elections and is very optimistic of getting an investor/industry friendly government," said Rakesh Goyal, Senior Vice President, Bonanza Portfolio Limited.
The Lok Sabha elections will be held from April 7 to May 12 and market participants are seen betting on the next government getting a strong mandate. This has triggered huge FII inflows and the Sensex has gained 1,393.32 points or 6.65 per cent this month.
The BSE Sensex ended the week at a new closing peak of 22,339.97, a gain of 584.65 points, or 2.69 per cent, over the last week.
The NSE 50-share Nifty gained 201 points, or 3.09 per cent, to settle at a historic closing high of 6,695.90.
FIIs have invested over Rs 7,500 crore during the past week.