The Indian equity markets seem to be gearing up for a take-off, on the back of heightened chances of the goods and services tax (GST) getting through parliament and an imminent stimulus package for the European Union.

Nevertheless, over-expectations from the Modi government on GST, key macro economic numbers and the rupee's relative strength might just act as dampeners.

In any scenario, the terminal of hope will have eager foreign investors waiting for the outcome of these political and economic events. Much will also depend on clear cues on the GST, as they have already checked-in and shipped-out Rs.6,000 crore in November alone.

"The market sentiment will be driven by developments in the winter session of parliament and how NDA (National Democratic Alliance) can pass the GST, which will be a positive surprise for the markets," Devendra Nevgi, chief executive of ZyFin Advisors, told IANS.

The government needs to pass the GST bill in this session to meet the April 1, 2016, roll-out deadline, as just parliamentary approval is not sufficient enough for the pan-India indirect tax regime.

The bill has been cleared by the Lok Sabha and is now with the Rajya Sabha, where the Congress and other parties have demanded a series of amendments.

Further, consensus on GST will send right signals to the FPIs (Foreign Portfolio Investors), who have been on a selling spree in the Indian debt and equity markets ahead of the US Fed's imminent rate hike decision slated for December.

"If both the government and the opposition are able to reach some resolution on GST, it will be taken positively, especially for FPIs because it should help in restoring their confidence that economic reforms would continue and gather pace," said Pankaj Sharma, head of equities for Equirus Securities.

Lately, FPIs sold Rs.1,538.66 crore or $232.44 million in equity and debt markets from November 23 to 27, the National Securities Depository Limited (NSDL) said.

The data with stock exchanges showed that the FPIs sold stocks worth Rs.1,492.84 crore in the period under review ended November 27.

The FPIs have taken out Rs.23,352 crore during the August-September period. Till date in November, the foreign investors have off-loaded stocks worth over Rs.6,000 crore.

Apart from GST, hopes of the European Central Bank (ECB) announcing a stimulus package during its next monetary policy meet slated for December 3 will be a major event that will keep the markets on tenterhooks.

"Data showing Germany's quarterly growth weakening has raised the expectations for ECB to announce a stimulus when it meets next week," Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.

Latest data on the German economy showed that its GDP (Gross Domestic Product) growth slowed to 0.3 percent from 0.4 percent on QoQ (quarter-on-quarter) basis due to weak exports and investments.

Gaurav Jain, director with Hem Securities, told IANS that the upcoming macro data like India's Jul-Sept GDP data, eight core industries (ECI) and monthly automobile sales figures will influence the markets.

"India's gross domestic product (GDP) data, global macroeconomic numbers, domestic auto sales numbers, rupee-dollar movement and the trend in commodity prices worldwide will dictate the trend on the bourses," Jain said.

The Reserve Bank of India's (RBI) last monetary policy ahead of the imminent US rate hike will be closely watched more for its commentary over growth and inflation outlook than anything else, said Vaibhav Agarwal, vice president and research head at Angel Broking.

"Markets will look forward for the RBI's stance on policy especially given the firming of inflation. However, we do not expect any movement on rates as the RBI will be cautious ahead of the US rate hike in December," Agarwal said.

The Indian equity markets made modest gains during the previous week ended Nov 27, with a barometer 30-scrip sensitive index (S&P Sensex) of the Bombay Stock Exchange (BSE) gaining 259.71 points or 1.00 percent to 26,128.20 points.

Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) rose during the previous week. It ended higher by 86.15 points or 1.09 percent to 7,942.70 points.