Indian shares opened higher on Tuesday, tracking the gains
in global equities ahead of U.S. inflation data due later in the
day, while fears of further rate hikes after domestic retail
inflation in January rose above the Reserve Bank of India's
upper threshold capped the move up.
The Nifty 50 index was up 0.41% at 17,843.00 as of
10:19 a.m. IST, while the S&P BSE Sensex rose 0.51% to
60,737.59.
Wall Street equities closed higher on Monday, as investors
expected consumer price index (CPI) data for January to ease.
A Reuters poll of analysts expects U.S. CPI for January to rise
0.5% month-on-month. Asian markets advanced, with the MSCI's broadest index of
Asia-Pacific shares outside Japan adding 0.44%. Twenty-eight of the Nifty 50 constituents advanced with UPL , Infosys , HCL Technologies , Tata
Consultancy Services among the top gainers.
High weightage information technology index rose nearly 1.5%, mirroring the overnight gains in tech-heavy Nasdaq Composite index . Hopes of easing inflation in the United States, from where India's software exporters draw a significant share of their revenue, spurred the move.
Analysts said that investors find the valuations in the sector attractive after the recent correction. IT is relatively less rate sensitive, compared to manufacturing or banking sectors, they added.
Investors await third-quarter earnings from a slew of Nifty 50 companies, including Adani Enterprises , Apollo Hospitals , Eicher Motors , Grasim Industries and ONGC .
The rise in retail inflation in January to 6.52%, above the upper limit of RBI's targeted band of 2-6% on higher food prices kept a lid on the gains in domestic equities. Economists flagged the likelihood of more rate hikes from India's central bank post the data. ($1 = 82.5250 Indian rupees) (Reporting by Bharath Rajeswaran in Bengaluru; Editing by Dhanya Ann Thoppil)
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