In absence of any major immediate trigger, stock markets will take cues from investment trends of foreign investors, crude oil prices and rupee movement, say experts.
"Market will await cues from international markets for its direction once financial markets reopen after Christmas holidays. It will start building hopes on the Budget and reforms agenda of the government for 2016," said Jimeet Modi, CEO, SAMCO Securities.
"Markets are expected to be range-bound with some amount of profit-booking likely to happen, though the under-current is still strong."
Some auto stocks may react on Monday to their monthly sales data announcements.
"Trend in global markets, investment by foreign investors, movement of the rupee against the dollar and crude oil price will dictate trend of the market in the near term," said Vivek Gupta, CMT, Director Research, CapitalVia Global Research Limited.
Also, the announcement of Purchasing Managers' Index (PMI) data for services and manufacturing sector due this week would influence trading.
In 2015, the benchmark BSE Sensex fell 1,381.88 points, or 5 per cent, and hit a one-year low of 24,833.54 on September 8, after gaining nearly 30 per cent in the previous year.
"A renewed interest from FIIs would be the deciding factor for the market, going forward. The start of Q3 2015-16 results would also weigh during the near term," said Vinod Nair, Head - Fundamental Research, Geojit BNP Paribas.
Most international markets were closed for the New Year.
Over the past week, the BSE benchmark Sensex rose 322.19 points to settle at 26,160.90.
"Going forward, we expect to see a gradual rise in markets backed by greater confidence in corporate earnings in 2016-17, coupled with a robust economic growth. We expect India Inc's bottomline to start improving over the next few months," said Kamlesh Rao, CEO, Kotak Securities.