The BSE Sensex should start little changed on Tuesday, with rate increases by leading banks a concern as this could potentially slow down consumer spending.
ICICI Bank, the second-largest lender, said it was raising its lending rates by 50 basis points from Wednesday, in line with the Reserve Bank of India's (RBI) tightening policy.
The announcement followed increases by market leader State Bank of India.
Although annual headline inflation in July slowed more sharply than expected to single digits, the RBI is unlikely to take the foot off the pedal on rate rises as it worries about broader price pressures.
Wipro will be watched after the Business Standard newspaper reported the company is planning to give a pay rise to employees at its IT services division with effect from October.
Cairn India will be on the radar after the Times of India reported Vedanta Resources' chairman as saying he does not foresee regulatory troubles in the stake buy.
The MSCI's measure of Asian markets other than Japan was up 0.6 percent by 0200 GMT, while Japan's Nikkei dropped 0.7 percent.
The Nifty India stock futures in Singapore were up 0.1 percent.
On Monday, the 30-share BSE index dropped 0.6 percent to 18,050.78.
STOCKS TO WATCH
* ARSS Infrastructure after it won a road works order worth 1.54 billion rupees in Orissa.
* Rural Electrification Corp after it raised 5 billion rupees via short-term debt, according to Thomson Reuters data.
(Reporting by Ami Shah and Nandita Bose; Editing by Ranjit Gangadharan
