Bombay Stock Exchange
People walk pass the Bombay Stock Exchange (BSE) building displaying India's benchmark share index on its facade, in Mumbai July 31, 2009 (representational image).Reuters file

The biggest trigger for the stock markets next week would be the bi-monthly policy statement by Reserve Bank of India (RBI) on Aug. 9, also governor Raghuram Rajan's last, since his term ends on Sept. 4, a month before the next policy meeting.

Rajan's views on the inflation trajectory in the wake of rising food prices and the government announcing the salary hike for Central government employees in accordance with the 7th Central Pay Commission's proposals, impact of the Goods and Services Tax (GST) Bill and global macroeconomic trends will be keenly watched. 

The Modi government issued a statement on Friday fixing the inflation target at 4 percent (+/- 2 percent) to be achieved by March 2021, broadly in line with the RBI's stiff target of around 5 percent. Retail inflation for June rose to 5.77 percent mainly due to food inflation that accelerated to 7.79 percent. 

Of course, questions on his possible successor are likely to crop up, notwithstanding Rajan speaking about it in a lighter vein during the previous policy meeting in June. "I have a prepared statement for that. As far as the question of my continuing with this position after September 4 goes, it will be cruel to spoil the fun that the press is having with all its speculation," Rajan said during the post-monetary policy press meet on June 7. 

BSE graph

Though the markets were lukewarm on Thursday after the Rajya Sabha passed the GST Bill on Wednesday, there was a 300+ point rally on Friday. 

Foreign institutional investors (FIIs/FPIs) were net buyers of Indian equities worth Rs. 435.63 crore while domestic institutional investors ended up with net purchases worth Rs. 616.32 crore.

The Indian rupee ended with gains of 14 paise at 66.78 to the US dollar.

Some of the prominent companies that will be declaring their June quarter results include Idea Cellular,

Hero Motocorp, Adani Ports, Apollo Tyres, Edelweiss, Lupin, Tata Global, Adani Enterprises and Godrej Properties. 

India's foreign exchange reserves rose $2.80 billion to $365.50 billion in the week ended July 29, 2016, according to the RBI's weekly statistical update released on Friday.