Besides, global cues such as the Russia-Ukraine conflict along with domestic quarterly earning results and flow directions of foreign funds will impact investors' sentiments.
Furthermore, market participants are expected to track macro-data such as the Index of ECI (eight core industries), fiscal deficit numbers and the final figures for FY21 GDP, which will be released during the trade week starting January 31.
Analysts opined that an upswing might be in store due to attractive valuations and absence of any pre-budget rally.
"The coming week will continue to be volatile with the Union Budget to be presented on Tuesday. 16,998- 17,374 could be the band in the near term while this band could widen on and post the Budget day next week," Deepak Jasani, Head of Retail Research, HDFC Securities told IANS.
"Whether the FPI selling halts or not will depend on their views on global equities and whether the Indian Budget is exciting enough for them to reverse their stand on India."
Till now in January 2022, the FIIs have sold over Rs 30,000 crore worth of equities due to various global factors including US Fed's plans to tighten its monetary policy.
Further, Jasani noted that sectorally banks, PSUs, auto, oil and gas and power indices look better than others suggesting some expectation buildup in these ahead of the budget.
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services, said: "Union Budget on February 1 and the Russia-Ukraine conflict would keep the market volatility high in the coming week as well. Expectations are running high from the government to present a progressive budget which can revive economic growth.
"However, given the various state elections, the risk of a populist budget cannot be ruled out completely. Capital goods, infra, housing, real estate, PSU banks amongst others are some of the sectors that would remain in focus ahead of the budget."
Additionally, Vinod Nair, Head of Research at Geojit Financial Services said: "The domestic trend will be muted in the short-term considering budget and state elections outcome.
"In the coming week, the release of PMI data for January will be another key domestic data point that the investors should watch."
In addition, the week ahead will witness the release of Q3FY22 corporate results from DLF, Exide, India Hotels, Adani Ports & Special Economic Zone and Bharat Petroleum Corporation amongst others.