After a largely disappointing October-December earnings season, outside of some sectors such as IT, investors expect the market in India to remain in a narrow range ahead of the budget on February 28.
Traders will also track domestic institutional investors' flows, who have been on a selling spree in recent months as retail investors continue to cash in a recent rally by selling their equity mutual funds.
Investors will be looking to see whether next year's budget will provide fiscal reform measures or whether the government will increase spending ahead of the general elections by 2014.
A fiscally disciplined budget could see the markets once again resume gains, the Sensex having fallen 2.15 percent so far this month.
KEY FACTORS TO WATCH
Tuesday: India bond, FX markets closed for banking holiday
Thursday: Budget session of parliament to begin
(Reporting by Manoj Dharra)
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