New Delhi, Jan 2 (IANS): Indian equity market is expected to trade sideways as rising Covid-19 cases may possibly dent broader market sentiments, analysts said.

In the past few days, due to increasing caseload several states have brought in some sort of restrictions, curfews, closure of select activities.

"Now onwards the rise could be slower in the new year when all players will return to their trading desks, 17,161 points is a support in the near term while 17,405-17,534 band could provide resistance," said Deepak Jasani, Head of Retail Research at HDFC Securities.

Notably, in 2021, investors bagged healthy returns of over 20 per cent.

"Going ahead, the positive momentum is expected to continue in 2022 as well. However, it is likely to start the New Year 2022 with its cautious sideways movement as Omicron spreads rapidly both in India and globally," said Siddhartha Khemka, Head - Retail Research, Broking and Distribution at Motilal Oswal Financial Services.

"For the full year, we are optimistic and expect Nifty to deliver around 12-15 per cent returns in 2022, supported by continuation of economic recovery and strong earnings growth."

Having said that, in the long run, strong earnings delivery along with positive macro-economic data would hold the key to drive markets upwards.

Besides, Vinod Nair, Head of Research at Geojit Financial Services is of the view that the market will be resilient despite Covid-19 concerns.

"Despite lingering fears surrounding surging Omicron cases, the domestic market is expected to maintain its resilience supported by a healthy long-term growth forecast for the domestic economy. IT, pharma, FMCG and telecom sectors along with the new-generation internet-based companies are expected to be the key drivers of the market in the coming year," Nair said.

"RBI's decision on interest rate hikes will be a major event tracked by the market. We have a constructive positive view on the market for 2022."