With no major domestic event lined up this week, equity markets would look at global trends, updates over the new virus strain and progress on vaccination to derive cues for further movement, analysts said.
Equity markets may also witness volatility amid the monthly derivative expiry.
"Going ahead, market is likely to maintain its positive momentum on the back of abundant liquidity, effective vaccine rollout and Brexit deal. The UK reached a historic trade deal with the European Union. However, emerging risk pertaining to new coronavirus strain in many parts of Europe may limit upside. The monthly F&O expiry could add to the volatility," said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.
Britain clinched a historic deal with the European Union on Thursday as both sides managed to thrash out a post-Brexit free trade agreement (FTA) just days before the December 31 deadline.
"For the week ahead, concerns regarding fresh cases of the virus will remain in the limelight along with development on Brexit deal. Investors should stay focused on quality sectors and counters and also watch at the trend of FII inflows, which is the main factor of the recent rally. No eventful data and announcements are expected this week," Vinod Nair, Head of Research at Geojit Financial Services said.
Satish Kumar, Research Analyst, Choice Broking said that investors should keep a watch on the UK virus situation and progress on vaccination.
During the holiday-truncated last week, the BSE benchmark inched up 12.85 points or 0.02 per cent. Markets were closed on Friday on account of Christmas.
Investment pattern of foreign portfolio investors (FPIs), movement of rupee and Brent crude would also be keenly watched by investors.