Mumbai: Despite the volatility and mixed first quarter results from some big corporate entities, key Indian stock market indices ended higher during the trading week that ended on July 15.

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Future directions, however, will depend on a host of issues, notably the way the monsoon session of parliament deals with key economic bills, analysts maintain.

The two key indices -- the sensitive index (Sensex) of the BSE and the Nifty of the National Stock Exchange (NSE) -- gained 2.6 per cent each last week, even though the last day of trading was marked by losses. 

The 30-scrip Sensex closed with a gain of 709.60 points or 2.62 per cent at 27,836.50 points, while the 51-scrip NSE Nifty surged 218.20 points or 2.62 per cent at 8,541.40 points.

The rise was also aided by foreign portfolio investors emerging as net buyers of equities worth $1.24 billion from July 11-15, as per data with the National Securities Depository Ltd.

"This was one of those weeks when the markets did very well but somehow it didn`t feel like that. May be because of information technology results, especially Infosys (which was below expectations), and also since the last session ended on a low note," Pankaj Sharma, Head of Equities, Equirus Securities, told IANS.

Looking ahead, analysts did not see much of an impact from the terror attack at Nice in France, but felt the passage of the goods and services tax by parliament (or not) held the key to influencing sentiments.

"The monsoon session of parliament and related developments on the passage of goods and services tax bill will be closely tracked. The markets are expecting a positive outcome. A negative outcome could be a source of disappointment," said Devendra Nevgi, Chief Executive of ZyFin Advisors.

Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS that the impact of the new tax regime on certain stocks was already being felt. 

"The terror attack in Nice ensured that investors were largely risk-averse on Friday, but the week still registered handsome gains in goods and services tax-themed stocks as well as state owned banks," James said.

"Improved potential for parliament`s monsoon session clearing the goods and services tax bill next week has lent a positive bias to the market lately. But being more of a long-term theme rather than a one off event, it is less likely that the week ahead will further ride on goods and services-linked stocks."

In a limited way, macro-economic data also had an impact on stocks. Four key numbers were announced last week -- retail inflation, wholesale inflation, industrial output and export-import data.This apart, the Reserve Bank is scheduled to take up its monetary policy review on August 2.

"The expectations of a rate cut have receded in view of the rise in both wholesale and retail inflation coming at 1.62 per cent and 5.77 per cent, respectively, for the month of June. Industrial production growth of 1.2 per cent was a positive surprise," said Aggarwal. 

Exports, too, logged a growth, albeit small, after 18 months of decline.

Also expected soon is the government`s announcement of the next round of capital infusion in state-run banks, for which Rs 25,000 crore has been earmarked for this fiscal. Then at an academic level, focus will also be on who is named the next governor of the Reserve Bank of India.

"The government may make the announcement on who will succeed Raghuram Rajan as the Reserve Bank Governor. This certainly would be important for investors," said Pankaj Sharma of Equirus.

"The new Reserve Bank governor is likely to be announced shortly, keeping the focus on the rupee, which was seen giving away gains on Friday, and state owned banks, which had outperformed last week," added James.

"Another interesting thing to note is that the some of the items which contributed positively in factory output growth are not really very good indicators of core industrial activity. For example, higher AC sales are good to see but we really doubt if 39 per cent growth in room air conditioners should be seen as a sign of industrial revival," James said.

"We also think that because of tepid industrial production growth, there would be huge pressure on the Reserve Bank to cut rates consistently and continuously, especially after Rajan departs."

With the results season kicking in, eyes will also be on the first quarter numbers. Among the big names, Tata Consultancy and Infosys announced theirs` last week. But no trend emerged. Reliance Industries, though, stunned the market with higher-than-expected profits.

"While Tata Consultancy was more positive in its management commentary, Infosys not only cut the full-year guidance for revenue growth but also highlighted the challenges industry is struggling with. So, this is a divergent view from two of the most keenly watched Indian IT companies. This, in our view, makes the IT sector very interesting at this point," Sharma said.

Nevgi added: "With the markets rallying since this month, aided by global sentiments, its important that earnings also catch up to sustain the rally or else the markets would go into an expensive zone."