Indian shares may open largely unchanged on Monday, tracking weak Asian markets as investors watch political developments in the U.S. and Europe and await cues from the Bank of Japan's monetary policy meeting that gets underway today.
The U.S. government shutdown continued for a second day, but there are some signs of progress to break the impasse. In Europe, Germany's Social Democrats have voted to enter coalition talks with Chancellor Angela Merkel's government.
The euro and pound both moved higher against the dollar and gold edged up while Brent crude prices rose modestly to snap a two-day losing streak.
U.S. stocks eked out modest gains to close at fresh record highs on Friday as optimism about the outlook for the economy and corporate earnings overshadowed concerns about a potential government shutdown as well as downbeat consumer sentiment data.
The Dow inched up 0.2 percent, the tech-heavy Nasdaq gained 0.6 percent and the S&P 500 added 0.4 percent. European stocks also closed Friday's session modestly higher after the release of strong economic data.
Closer home, the BSE Sensex jumped around 2.7 percent to hit a record high last week and the broader Nifty index climbed 2 percent after the government reduced its additional borrowing target for the year and the GST Council announced cut in the tax rate on 29 goods and 54 categories of services.
Reliance Industries' shares could be in focus today after the company reported a 25 percent rise in quarterly profit, beating analysts' estimates. Jio Infocomm has posted its first quarterly net profit since kicking off its service in September 2016.
Wipro's quarterly profit was hit by the insolvency of one of its clients while HDFC Life's Q3 profit grew 15 percent from last year. Asian Paints, Axis Bank, DHFL, GNFC and Justdial will unveil their quarterly results later in the day.
It's going to be a holiday-shortened week as markets will remain closed on Friday for Republic Day. Volatility is also expected amid the futures and options (F&O) expiry due on Thursday.
Meanwhile, the stake sale in HPCL is expected to help the government in sticking to its fiscal deficit target of 3.2 percent of the GDP this financial year.
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