Indian shares set to open higher; focus turns to Fed policy

BENGALURU (Reuters) - India's benchmark Nifty 50 is set to open higher on Wednesday, as the focus turns to the U.S. Federal Reserve's policy decision, while domestic and U.S. data re-ignited inflation concerns and elevated bets of delay in rate cuts.

India's GIFT Nifty was down 0.02% from its overnight close at 21,067, as of 8:15 a.m. IST, indicating that the Nifty 50 will open higher than its Tuesday closing level of 20,906.40.

India's retail inflation in November rose at its fastest pace in three months at 5.55% due to higher food prices, but stayed below the Reuters forecast of 5.70%.

"We think the Reserve Bank of India (RBI) will keep rates on hold for several months and even if there are rate cuts in mid-2024, we expect them to be limited," said Pranjul Bhandari and Aayushi Chaudhary, economists at HSBC.

Inflation concerns in the U.S. re-emerged after data showed the Consumer Price Index (CPI) unexpectedly inched higher in November month-on-month, but edged lower on an annual basis. The data bolstered expectations that the Fed will not pivot to rate cuts early next year.

Wall Street equities closed higher overnight, ahead of the Fed policy due at 12:30 a.m. IST on Thursday.

Asian markets opened lower. [MKTS/GLOB]

The Nifty 50 has logged new all-time highs in eight of the previous nine sessions. However, on Tuesday, the benchmark logged its biggest single-day percentage loss since Nov. 1 as a recent rally in energy and realty shares stalled.

Energy stocks will be in focus again in Wednesday's session as Brent crude futures fell over 3% on Tuesday, falling to a six-month low on U.S. inflation data, adding to demand worries and persistent concerns of oversupply.

A fall in oil prices is positive for importers of the commodity like India and its oil marketing companies. [O/R]

STOCKS TO WATCH:

** Reliance Industries: Company invests an aggregate amount of 4.18 billion rupees in five subsidiaries of Mercury Holdings; the company has also held talks with Walt Disney to merger their Indian entertainment operations.

** Laurus Labs: U.S. drug regulator issues Form 483 with five observations after inspection at the Andhra Pradesh plant.

** Shilpa Medicare: Company's unit in Bengaluru gets approval from TGA, Australia, for manufacturing, labeling, packaging and testing of medicinal oral mouth dissolving films.

** Axis Bank: Private equity company Bain Capital is poised to divest a stake worth $444 million through a block deal, Moneycontrol reported.

(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Janane Venkatraman)