The Sensex and the Nifty should trade in a range ahead of RBI's policy review on Tuesday, with analysts expecting the central bank to lower interest rates by 25 basis points.
A rate cut could spark gains after recent volatility in shares following the 2013/14 budget, unveiled last month, largely disappointed investors.
Given the high cash deficit, analysts do not rule out a potential cut in the cash reserve ratio.
The government is also set to announce its borrowing calendar for the first half of the fiscal year on Monday.
KEY FACTORS/EVENTS TO WATCH :-
Monday: April-Sept government borrowing calendar
Tuesday: RBI policy review
Wednesday: Money supply data