The Rajya Sabha has decided to have a discussion on December 6 and 7 on the issue under a rule that entails voting, soon after the Lok Sabha which will have a similar discussion on December 4 and 5.
After the BSE stock market benchmark Sensex last week registered 833.33-point gain, the index closed at a 19-month high level. There are high chances of profit booking ahead of an eventful week, they added.
On Monday (December 3), markets are expected to see stock-specific movements as investors react to monthly sales data for auto and cement companies, brokers said.
So far, the festive season this year has turned out to be a mixed bag for the automobile industry in November.
Political talk on the imminent voting may lead to volatile trading patterns, said analysts.
"For the Indian markets, the vote on FDI in multi brand retail which is scheduled this week may act as a big trigger," Alex Mathews, Head Research, Geojit BNP Paribas Financial Services said.
While BJP has expressed confidence that the Left parties, NDA allies-JD(U), SAD and Shiv Sena, as well as AGP, TDP, AIADMK, INLD, TMC, BPF, JMM will vote against the FDI decision, key UPA supporter SP has sent mixed signals. BSP supremo Mayawati has also kept up the suspense on her party's stand on the voting in Rajya Sabha.
"If government is able to push through some of the important reform initiatives, the markets will gain further, especially beaten down sectors like infrastructure, capital goods, public sector banks," said Dipen Shah, Head of Private Client Group Research, Kotak Securities.
Later on Monday, European finance ministers will meet to try and approve the latest aid payment to Greece, after failing to agree last week with the IMF over those conditions.
Global investors will also focus on continued negotiations over the so-called 'US fiscal cliff', said experts.
If there are no nasty surprises locally or globally, the bullish sentiment in the Indian market is likely to continue as FII inflows have topped Rs 1 lakh-crore mark in 2012.
Globally, this week will see three market-moving data releases in the US -- ISM Manufacturing Index (Dec 3), Jobless Claims (Dec 6) and Employment Situation (Dec 7).
In Europe, a spate of manufacturing, services and government economic data releases across different nations throughout the week will be keenly watched.
The outcome of the ECB governing council meeting in Frankfurt on Thursday will also keep investors on the edge, said traders.