Sensex gains for second session; focus on CPI data

REUTERS - The BSE Sensex rose for a second consecutive session on Monday, led by Tata Motors after it posted robust sales for February and on improved global risk appetite after gains on Wall Street and in Europe last week.

But some caution ahead of consumer inflation data, due after the close of markets, tempered gains. Analysts polled by Reuters expect a 5.6 percent rise in consumer prices in February from 5.69 percent in January, which could leave the door open for a rate cut by the Reserve Bank of India (RBI).

Data earlier showed wholesale price inflation had fallen a bigger-than-expected 0.91 percent in February, easing for a 16th consecutive month.

 

"We have been gaining on rate cut hopes since the budget (on Feb. 29)," said Daljeet Singh Kohli, head of research at India Nivesh Securities.

"Markets have already priced in a 25 basis points rate cut," he added, noting such a scenario would likely lead to a retreat in shares.

The broader NSE Nifty rose 0.32 percent to 7,534.33 at 0748 GMT, while the benchmark BSE Sensex gained 0.44 percent to 24,826.10.

Indian shares have risen in eight out of ten sessions in March, boosted by foreign flows. Overseas investors have bought a net $1.41 billion worth of shares so far in March, paring this year's outflows to $1.48 billion.

Among the gainers, Tata Motors rose 3.4 percent, its second session of gains, after the auto maker on Friday said global wholesales in February, including that of Jaguar Land Rover, grew 17 percent.

Iron ore miner NMDC gained 1.2 percent after raising iron ore lump prices.

Drugmakers, however, dropped after the government banned the manufacture and sale of more than 300 combination drugs. Pfizer lost more than 7 percent.

Coal India fell 6.5 percent to a near 2-month low as the stock turned ex-dividend on Monday.

($1 = 66.9600 Indian rupees)

(Reporting by Aastha Agnihotri; Editing by Sunil Nair)