Indian shares rose on Tuesday led by gains in oil explorers such as Reliance Industries, tracking a rise in crude oil prices after a slump to near 11-year lows in the previous session triggered investors' buying appetite. The broader NSE index ended 0.66 percent higher while the benchmark BSE index ended up 0.68 percent. Reliance Industries' shares advanced 2.2 percent in the session, rising for a fourth straight day.
India's central bank kept its key lending rate unchanged on December 1, leaving the door open for more easing but making that dependent on meeting a challenging inflation target for 2017. Investors have mostly priced in a Fed rate hike this week, with the main question now hinging on how many increases will follow next year. The US Federal Reserve will move very gradually after it delivers what is widely expected to be its first interest rate hike in nearly a decade on December 16, according to a Reuters poll that points to a tame inflation outlook for next year.
"(RBI) Governor (Raghuram) Rajan will keep an eye on Fed's comments before deciding on the future interest rate trajectory," said Deven Choksey, managing director at K R Choksey Securities. Among state-run banks, Punjab National Bank declined 2 percent, while State Bank of India fell 0.6 percent. Sun Pharmaceutical Industries rose 0.8 percent after the company said it had divested its Ohio unit to Nostrum Labs.