US markets ended the week on a positive note with the Dow Jones gaining nearly 200 points on Friday. The Dow and the S&P 500 managed to end higher for the third straight week on the back of softening inflation data.

The June data for US personal consumption expenditures price index continued to ease on Friday. The gauge showed core PCE gaining 0.2 percent month-on-month, in-line with the 0.2 percent forecast by economists polled by Dow Jones.

Back home, this week will be one dominated by Auto stocks. As we begin the month of August on Tuesday, companies will be reporting their monthly sales numbers. Brokerage firm Nomura is expecting a slower month for both passenger vehicles and two-wheelers. Demand has been tepid, particularly for the small car segment, as discounts inch higher and waiting periods lower.

Not only auto sales, three major auto companies will also be reporting their June quarter earnings this week. Maruti reports its results on Monday, while Eicher Motors and Mahindra & Mahindra will be reporting results on Thursday and Friday respectively. Other major earnings this week include Ambuja Cements on Wednesday, along with Dabur and Bharti Airtel on Thursday.

A strong close in the US may lend support to the Indian markets. Last week saw the Nifty 50 snap a four-week gaining streak after consolidating with a negative bias. Dealing rooms that CNBC-TV18 spoke to suggest that the index is now going to trade in the 19,400 - 19,800 range for the near-term. FIIs were sellers in the cash market on Friday, while DIIs were buyers to the tune of Rs 1,634 crore.