Indian shares rise

Indian shares reversed losses to end stronger on Monday on optimism ahead of the retail inflation data due later in the day while sentiment was boosted after European shares gained on increased mergers and acquisition activity in the healthcare sector. The local share market had earlier dropped as much as 0.5 percent as lower oil prices hurt energy stocks.
Traders will closely watch the retail inflation print, due to be released at 1130 GMT, which is likely to determine the central bank's stance during its monetary policy review on February 3. A Reuters poll showed the consumer price index accelerating to 5.4 percent in December from 4.4 percent in November, but still within the central bank's comfort zone. The benchmark BSE index closed 0.46 percent higher at 27,585.27. The broader NSE index gained 0.46 percent to 8,323.
The slide in oil prices helped offset the positive impact after data on Friday showing US wages fell by the most since the series began in 2006 raised hopes the Federal Reserve would be patient in raising interest rates. Traders were also cautious ahead of key retail inflation and industrial output data due later in the day. A Reuters poll showed the consumer price index accelerating to 5.4 percent in December from 4.4 percent in November, still within the central bank's comfort zone.
Foreign institutional investors have been net sellers of $311.79 million worth shares this month, adding to the weaker sentiment. "As per expectations, markets have started correcting. We might see some volatile session going forward, but I don't expect any major fall," said G. Chokkalingam, founder of Equinomics, a research and fund advisory firm. "Inflation numbers should fall: Expect RBI to cut rates in its February policy."
Reliance Industries declined 2 percent and ONGC fell 1.4 percent as global oil prices extended their slide after Goldman Sachs lowered its short-term price outlook. Among other losers, Coal India slumped on media reports the government plans to sell a 10 percent stake in the state-run company to raise 240 billion rupees ($3.86 billion), citing an unnamed official Auto stocks such as Tata Motors fell 1.1 percent, Mahindra and Mahindra dropped 1.14 percent, and Hero Motocorp declined 1.6 percent. However, state-run banks rose as bonds gained ahead of CPI data.