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The market is expected to do well, as the Street expects positive announcements from the government's maiden Budget.
Stocks in the engineering, cement, power, infrastructure and real estate sectors, predominately dependent on the domestic economy, are likely to remain in focus in the run-up to the Budget, likely on July 10. Investors are likely to increase exposure to such stocks, said analysts.
"These (domestic cyclicals) are the sectors where there is a lot of hope," said U R Bhat, managing director, Dalton Capital. "People expect the Budget to tackle issues like higher incentives to entrepreneurs and the government and more investments into these sectors."
A sudden surge in oil prices, if the conflict in Iraq worsens, could pose a risk to equities, warned analysts.
Last week, the BSE Sensex ended the week flat at 25,099. The NSE Nifty closed the week at 7,508.
Stocks in defensive sectors such as technology and healthcare outperformed benchmark indices as the mood remained cautious due to tensions in Iraq.
Analysts said the Nifty could make an attempt to scale to 7,700 levels as optimism surrounding the Budget could push stocks higher.
The broad range for the Nifty could be anywhere between 7,400 and 7,700 levels, with support levels at 7,481. A decline below this level could led to a sharper fall.
Foreign flows so far have remained choppy in June as participants booked profits ahead of the Budget announcement. Last week, overseas investors were net buyers, at Rs 238 crore.
"Budget expectations would get tempered as the week comes to an end. To that extent, inflows could also see a drop," said Ambareesh Baliga, managing partner, Edelweiss Global Wealth.
Some sections of the market said the downsides in the market could be limited as the Budget announcements are expected to revive growth in the economy.
