Indian shares opened higher on Tuesday, as sentiment was lifted by data showing domestic retail inflation for November eased below the RBI’s tolerance limit, although focus will now be on the U.S. inflation data due later in the day.
The Nifty 50 index was up 0.18% at 18,529.80, as of 09:20 a.m. IST, and the S&P BSE Sensex rose 0.14% to 62,218.81.
India’s annual retail inflation eased to 5.88% in November from 6.77% in October, amid softer rise in food prices, government data showed on Monday, bolstering expectations of a slower pace of interest rate hikes. Analysts in a Reuters poll had predicted a November reading of 6.40%.
Retail inflation had been above the upper end of the Reserve Bank of India’s (RBI) 2%-6% tolerance band since January, prompting the central bank to raise rates by 225 basis points, including a 35 basis points increase last week.
Investors will now focus on the U.S. inflation data due at 7:00 p.m. IST (1330 GMT) and the Federal Reserve’s rate decision, scheduled to release later this week.
Wall Street equities advanced overnight as investors took an optimistic stance hoping that the now-hefty pace of increases in interest rates will finally slow.
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