The Nifty is likely to open in the green with indicator SGX Nifty trading at 7996.50, up 17 points. But all eyes will be on the Reserve Bank policy expected later in the day.
Meanwhile, the 30-share BSE Sensex rose 17.47 points to close at 26145.67 and the 50-share NSE Nifty declined 7.45 points to 7935.25 but the BSE Smallcap index outperformed benchmarks, rising 0.8 percent. Even the market breadth was positive as about 1626 shares advanced against 1078 declining shares on the BSE.
Meanwhile, most Asian peers too are trading higher despite a negative finish from Wall Street overnight. Chinese markets opened in the red after investor sentiment took a hit from private and official November PMI surveys.The Shanghai Composite was down 7 points, or 0.22 percent, at 3,439 after the official data was released. The smaller Shenzhen Composite and the tech-heavy Chinext was flat, while the CSI 300 Index was down 0.3 percent.
Japan's Nikkei 225 was trading 170 points, or 0.87 percent, higher at 19,918 ahead of the unveiling of the 2016 fiscal budget.
The Seoul Kospi was up 21 points, or 1.06 percent, at 2,012 in morning trade as official data from the Ministry of Trade, Industries and Energy showed South Korean exports contracted for 11th consecutive month in November.
The ASX 200 traded 81 points, or 1.57 percent, higher at 5,248 in morning trade. The Reserve Bank of Australia (RBA) will meet later in the day but analysts do not foresee any changes in Australia's monetary policy.
However, the finish from Wall Street overnight was on the lower side. US stocks closed lower on Monday, weighed by retail results. The Dow Jones Industrial Average was down 79 points, or 0.44 percent, at 17,720; the S&P 500 was 10 points, or 0.46 percent, lower at 2,080; and the Nasdaq fell 19 points, or 0.37 percent, to 5,109.
And in Europe, equities closed trade in mixed territory at the start of an important week for markets and the ECB.
In the currency space, the dollar gains marginally against major currencies as expectations for further stimulus this week from the European Central Bank drove the euro to its lowest since April.
In commodities, crude turned choppy after OPEC oil output rose in November from the previous month, led by a rebound in Iraqi exports.
From the precious metals space, gold steadied around USD 1060 per ounce.