Market analysts observed that cues from Parliament's winter session, coupled with the direction of foreign fund flows and the rupee's movement against the US dollar will also impact investors' risk-taking appetite.
"The next week would begin with the Assembly election results being declared. All eyes would be on the outcome. While the exit polls predict a victory for the NDA (National Democratic Alliance), the margin of the same will matter more for the market sentiment," Devendra Nevgi, Founder and Principal Partner, Delta Global Partners, told IANS.
"The market is already pricing the best case scenario and some short covering had helped the sentiment too. A high vote share would raise the chances of NDA winning in the 2019 general elections. With the foreign investors in holiday mood, the activity levels are likely to be lower with support from DIIs (domestic institutional investors)."
According to Vinod Nair, Head of Research, Geojit Financial Services: "The verdict of the Himachal (Pradesh) and Gujarat state elections will be the key trigger for the market next week."
"Cues from the winter session will also be closely followed. Any deviation from the exit polls could negatively impact the market sentiment in the near to medium term. After the election results, the markets will also look towards global cues and US tax reforms," Nair said.
In terms of economic indicators, the healthy exports figures for November released after market hours on last Friday are expected to give a fillip to the equity markets.
Currency-wise, the rupee had strengthened by 41 paise to close at 64.04 against the US dollar from its last week's close at 64.45.
"The rupee has been one of the best-performing currencies in the world... We continue to expect inflows in debt and equity. As a result, rupee can range between 63.80 and 64.30," Anindya Banerjee, Deputy Vice President for Currency and Interest Rates with Kotak Securities, told IANS.
"We can see equities rallying and so too currency once the results are out. However, do not expect a repeat of the post-Uttar Pradesh impact, as positioning is already aggressively in long rupee and long equities."
As per provisional figures from the stock exchanges, foreign institutional investors (FIIs) sold scrips worth Rs 609.91 crore during the week.
On technical levels, the National Stock Exchange (NSE) Nifty's upside faces an immediate resistance at 10,410 points-mark.
"Technically, while the Nifty has surged higher, traders will need to watch if the recent rally can sustain early next week," said Deepak Jasani, Head of Retail Research for HDFC Securities.
"Further, upsides are likely once the immediate resistances of 10,410 points are taken out. Weakness could resume if the supports of 10,265 points are broken."
Last week, the key Indian equity indices -- the BSE Sensex and the NSE Nifty50 -- rose as expectations of the BJP's political victory in the Gujarat and Himachal Pradesh
assembly elections grew.
Consequently, the 30-scrip Sensitive Index (Sensex) of the BSE rose by 428.77 points, or 1.3 per cent, to close at 33,462.97 points.
Similarly, the Nifty50 of the NSE edged higher by 67.6 points, or 0.66 per cent, to close the week's trade at 10,333.25 points.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)