MUMBAI (Reuters) - The Nifty edged higher on Tuesday, gaining for the fourth straight day as rate-sensitive stocks such as banks rose after a better-than-expected December retail inflation data raised hopes that the Reserve Bank of India would cut rates in February.
India's annual consumer price inflation accelerated for the first time in five months in December to 5.0 percent, compared with a 5.4 percent annual rise predicted by analysts in a Reuters poll.
However, gains were capped after a sharp fall in energy stocks such as Oil and Natural Gas Corp as oil prices fell further to hit a near six-year low.
Overseas investors bought Indian shares worth of 2.45 billion rupees ($39.46 million) on Monday, provisional exchange data showed, after selling shares worth $517.57 million in the past four consecutive sessions.
"It's earnings season and we expect stock-specific action. Data released yesterday was positive and financial stocks should do well. We are cautiously optimistic in the near term," said Suresh Parmar, head of institutional equities at KJMC Capital Markets.
The benchmark BSE Sensex edged down 0.04 percent to 27,578.18, while the broader NSE index gained 0.19 percent to 8,338.75.
Rate-sensitive stocks gained. State Bank of India is up 0.7 percent, while Bank of Baroda Ltd is up 1.1 percent.
Shares in Hindalco Industries Ltd are up 1.3 percent after rival Alcoa Inc's earnings beat forecasts.
However, energy shares fell, with Oil and Natural Gas Corp losing 2.1 percent and Reliance Industries declining 0.6 percent, tracking a fall in global crude prices. ($1 = 62.0850 rupees)
(Reporting by Indulal PM; Editing by Anand Basu)
