Indian shares edged up on Wednesday on hopes the central bank would cut interest rates later in the day as Prime Minister Narendra Modi's currency gamble threatens to hit nearly every aspect of the economy, from consumers to supply chains.
A majority of the nearly 60 analysts polled by Reuters predict the Reserve Bank of India will cut the repo rate by 25 basis points to 6.00 percent, the lowest since November 2010, while six expect a deeper 50 bps cut.
The announcement is due at 1430 India time (0900 GMT).
Globally, Asian shares edged up as investors covered short positions and waited for clues about the future of the European Central Bank's asset-purchase programme from a policy meeting on Thursday.
"The market is expecting a minimum 25 bps cut in interest rates," said Vinod Nair, head of research at Geojit BNP Paribas Financial Securities, adding that it may not be enough to bring back the economy to levels expected.
"Another rate cut is in the offing, with the debate centred on the quantum," DBS said in research note.
"Consensus expects a 25 bps cut in the repo rate to 6 percent, with a small camp vying for a bigger 50 bps reduction. Either way, it is amply clear that the RBI MPC (monetary policy committee) is likely to prioritise growth over external uncertainties, in light of the recent banknote ban."
The Nifty was up 0.28 percent at 8,165.70 by 0544 GMT, while the Sensex was 0.19 percent higher at 26,442.39.
Financial stocks rose with Housing Development Finance Corp Ltd and ICICI Bank Ltd leading the gains.
Sun Pharmaceutical Industries Ltd was the top percentage loser on the Nifty, shedding as much as 4.55 percent, on worries the U.S. drug regulator would issue a report citing violations at its Halol plant in Gujarat.
(Reporting by Darshana Sankararaman in Bengaluru; Editing by Subhranshu Sahu)