The upcoming monetary policy review coupled with macro-economic data points will influence the trajectory of key equity indices in the week ahead.
Market observers said that even direction of foreign fund flows, rupee's movement against the US dollar as well as global crude oil prices will also affect investor sentiment.
"With an eight per cent gain in March, stocks are sitting in an overbought zone," said Sahil Kapoor, Chief Market Strategist-Research, Edelweiss Wealth Management.
"However, the trend remains conclusively higher. The focus should continue to be stock specific and mid-small cap."
According to DK Aggarwal, Chairman and Managing Director, SMC Investments and Advisors: "Going forward, market participants will closely watch each development regarding progress in US-China trade talks."
"Market is further expected to take cues from the RBI meeting that is scheduled next week."
Besides the monetary policy review slated for April 4, investors will look out for macro-economic data points such as the eight core industries' (ECI) output numbers.
In addition, the PMI manufacturing and services' figures, along with monthly automobile sales data will be released during the week.
"India is likely to continue its outperformance among emerging markets due to FIIs inflow, the expectation of revival in earnings growth and political stability," said Vinod Nair, Head of Research at Geojit Financial Services.
"Instances like stability in the domestic economy, possible reaping from last reforms, post-election normalisation, reduction in domestic interest rate, pick-up in credit growth and reduction in global bond yields leading to higher inflows from foreign investors have deeply benefitted India, in which Mid and Small caps will outperform."
Apart from macro-data, the movement of rupee against the US dollar will also dictate the trend on the bourses next week.
On a weekly basis, the rupee weakened slightly to 69.16 per greenback.
"Expect rupee to be under some pressure as crude also traded firm above $67 to a barrel," said Sajal Gupta, Head Forex and Rates, Edelweiss Securities.
"The coming general elections may also lead to slower inflows or profit booking. Rupee can test 70 level in May, with the broader range being 68.80 to 69.80."
In terms of investments, provisional figures from the stock exchanges showed that foreign institutional investors bought scrip worth Rs 32,371.43 crore during this month.
As per technical charts, the underlying trend for the National Stock Exchange (NSE) Nifty50 remains bullish.
"Technically, with the Nifty continuing to rally higher and remaining in a firm uptrend, the index could attempt to target the current life highs of 11760 in the coming weeks," said Deepak Jasani, Head of Retail Research at HDFC Securities.
"It will be important that the Nifty holds above the immediate support of 11,452 for the uptrend to sustain."Last week, the S&P BSE Sensex gained 1.33 per cent while the NSE Nifty50 advanced by 1.46 per cent.