Indian shares rose for a second consecutive session on Monday, led by Tata Motors after it posted robust sales for February and on improved global risk appetite after gains on Wall Street and in Europe last week.

But some caution ahead of consumer inflation data, due after the close of markets, tempered gains. Analysts polled by Reuters expect a 5.6 per cent rise in consumer prices in February from 5.69 per cent in January, which could leave the door open for a rate cut by the central bank.

Data earlier showed wholesale price inflation had fallen a bigger-than-expected 0.91 per cent in February, easing for a 16th consecutive month.

"We have been gaining on rate cut hopes since the budget (on February 29)," said Daljeet Singh Kohli, head of research at India Nivesh Securities.

"Markets have already priced in a 25 basis points rate cut," he added, noting such a scenario would likely lead to a retreat in shares.

The broader NSE index rose 0.38 per cent or 28.55 points to 7,538.75, while the benchmark BSE index gained 0.35 per cent or 86.29 points to 24,804.28.

Indian shares have risen in eight out of ten sessions in March, boosted by foreign flows. Overseas investors have bought a net $1.41 billion worth of shares so far in March, paring this year's outflows to $1.48 billion.

Among the gainers, Tata Motors rose 3.36 per cent, its second session of gains, after the auto maker on Friday said global wholesales in February, including that of Jaguar Land Rover, grew 17 per cent.

Iron ore miner NMDC gained 1.99 per cent after raising iron ore lump prices.

Drugmakers, however, dropped after the government banned the manufacture and sale of more than 300 combination drugs. Pfizer lost 8.67 per cent.

Coal India fell 6.96 per cent to a near 2-month low as the stock turned ex-dividend on Monday.

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