Indian shares inched higher on Tuesday, in line with broader Asia, as investors heaved a sigh of relief after the United States shelved plans to impose tariffs on Mexico, and on hopes that U.S. interest rates will be cut as early as next week.
Investors had fretted that opening up another trade conflict while still battling with China, could push the United States and other major economies into recession.
Meanwhile, U.S. President Donald Trump said on Monday he was ready to impose another round of tariffs on Chinese imports if he cannot make progress in trade talks with his Chinese counterpart Xi Jinping at a Group of 20 summit later this month.
The broader Nifty was up 0.26% at 11,954.90 as of 0534 GMT, while the benchmark Sensex was 0.35% higher at 39,916.58.
"Domestically, people are hoping for the (Union) Budget. There is a need to support the economy and increase spending," said Vinod Nair, head of research at Geojit Financial Services.
"Earnings growth has slowed and valuations are high, so the market will be a bit cautious."
India will announce its full-year budget on July 5 as Prime Minister Narendra Modi's government hopes to stimulate growth, which slowed to its lowest in four years in the quarter ended March.
Shares of Vedanta Ltd ticked higher and topped the NSE index after copper prices extended gains to a near three-month high on hopes of higher Chinese imports.
Indiabulls Housing Finance was the top loser on the Nifty, falling 6.5%, after the company was dragged into an embezzlement suit on Monday.
The company termed the allegations as "bizarre" in a filing to the exchanges.
Jet Airways Ltd slipped as much as 14% to a record low after the Mint newspaper reported its two bidders -- the Hinduja Group and Etihad Airways -- may not proceed with plans to resurrect the debt-ridden airline.