Foreign institutional investors (FIIs) have bought around $2.5 billion in shares as of Thursday in December, bringing their net purchases for the year so far to around $19.9 billion.
The gains could allow indexes to post a second consecutive yearly advance, with the NSE index up 6.9 percent so far this year, compared with a 27.7 percent gain in 2012. Investors will also be paying close attention to Apollo Tyres Ltd, whose $2.5 billion agreement to buy Cooper Tire & Rubber Co is due to expire on Dec. 31.
Traders are also awaiting the release of a RBI report due by the end of the month that is expected to unveil a major change in the monetary policy to explicitly make managing consumer inflation, rather than wholesale prices, its main objective.
Investors will also start shifting their focus towards October-December earnings results starting in January.