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Indian shares will likely open higher on Tuesday, after its posting best session in eight weeks, ahead of the U.S. Federal Reserve policy decision and commentary as well as India's interim Federal budget due later in the week.

India's GIFT Nifty was trading at 21,961 points as of 7:50 a.m. IST, suggesting the NSE Nifty 50 will open above its Monday close of 21,737.60.

The Nifty 50 and the BSE Sensex logged their best day since Dec. 4, 2023, on Monday, driven by gains in heavyweights Reliance Industries and ONGC as oil prices climbed.

Wall Street equities rose overnight with the S&P 500 hitting a fresh record high, ahead of key corporate earnings and Fed policy decision on Wednesday. Asian markets were muted. [MKTS/GLOB]

India's interim budget on Thursday and Fed policy on Wednesday will be the major near-term triggers for domestic equities, according to two analysts.

"Despite premium valuations, confidence is upheld among investors due to the optimistic environment surrounding the interim budget," said Vinod Nair, head of research at Geojit Financial Services.

"The upcoming Fed policy is also crucial, as investors eagerly await the U.S. central bank's commentary to get cues on future rate paths," Nair added.

Foreign institutional investors snapped a seven-session selling streak on Monday and bought shares worth about 1.10 billion rupees ($13.23 million) on a net basis, exchange data showed.

Domestic institutional investors remained net buyers, adding shares worth 32.21 billion rupees.

STOCKS TO WATCH:

** ITC: Company posted third-quarter profit beat on strong demand for cigarettes.

** Bajaj Finance: Company missed December quarter profit view on lending tool ban, higher provisions.

** Zee Entertainment Enterprises: Sony scrapped the $10 billion merger of its Indian arm with the company as Zee failed to meet financial terms, according to a termination notice reviewed by Reuters.

** KEC International: Company won new orders worth 13.04 billion rupees across its various businesses.

** Key results on Tuesday: Bajaj Finserv, Dr Reddy's Laboratories, Larsen and Toubro.

($1 = 83.1480 Indian rupees)