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Indian shares recovered from a lacklustre start and logged gains on Tuesday, led by a rebound in information technology stocks, as investors await key domestic and U.S. economic data due later in the week.

The blue-chip index NSE Nifty 50 rose 0.34% to 22,198.35 while the BSE Sensex settled 0.42% higher at 73,095.22.

While the benchmark Nifty 50 hit fresh record highs in every session last week, it has traded within a narrow 150-point range for three consecutive sessions.

"The outlook for domestic equities remains positive, helped by favourable liquidity and strong economic outlook, but consolidation will likely continue at record high levels for the next few sessions due to high valuations," said Sunny Agrawal, head of fundamental equity research at SBICaps Securities.

IT index gained 0.72%, led by a 2.58% rise in Tata Consultancy Services after UBS upgraded the stock and estimated earnings recovery in fiscal 2025.

Realty stocks also gained about 1.07%, helped by robust residential sales in top cities during the March quarter.

The broader, more domestically focussed small-caps gained 0.28%, mirroring benchmarks, while mid-caps lost 0.12%.

Among individual stocks, McDonald's India operator Westlife Foodworld dropped about 1.5% after Reuters reported that India's Maharashtra state will widen scrutiny of global restaurant operators to check if they use cheese alternatives in products while promoting them as real cheese.

Havells India hit a 2-1/2 year high after Goldman Sachs forecasted double-digit revenue growth for the company from the March quarter and upgraded the stock.

Broader Asian markets logged marginal gains on Tuesday, ahead of the release of key U.S. data, including the Federal Reserve's preferred measure of inflation the U.S. core personal consumption expenditures price index, on Thursday. [MKTS/GLOB]

Domestic data, due on the same day, is expected to show India's growth likely moderated to 6.6% year-on-year in the October-December quarter.