Federal Reserve's meeting during the week will be keenly eyed as investors will look for clues on the timing of an interest rate hike.

"...Market is now likely to focus largely on how the monsoon progresses over the next few weeks in wake of sub-par monsoons predicted by the IMD," said Hitesh Agrawal, Head Research at Reliance Securities.

Showing signs of recovery, factory output rose to a two month high of 4.1 per cent in April, driven by manufacturing, but retail inflation too edged up in May amid worries over deficient monsoon.

Factory production measured on Index of Industrial Production (IIP) grew by 4.1 per cent in April as against 3.7 per cent in the year-ago period and 2.5 per cent compared with the preceding month. The Consumer Price Index (CPI) which had dipped to a four month low in April, inched up to 5.01 per cent in May.

"...While the initial reaction to these data points is expected to be positive early next week, it is sustainability of gains which is questionable considering the weak set-up that the Indian stock market is in currently," Agrawal added.

Experts believe one of the key determinants, which markets are eyeing and would play crucial role ahead is the progress of monsoon. On global front, two-day meeting of the US Federal Open Market Committee is scheduled on June 16-17.

"Participants expect that the prevalent uncertainty over rate hike in US may ease post this meeting," said Jayant Manglik, President-retail distribution at Religare Securities.

For the week, the benchmark BSE Sensex fell by 343.19 points to 26,425.30. In straight three weeks, the index has crashed by 1,532.20 points or 5.48 per cent.

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