Among the shares that rallied in early trade from the S&P CNX Nifty were Tata Motors, Coal India and Ranbaxy Laboratories. Among the shares that lost ground in early trade were Sterlite Industries, Infosys Technologies and Sun Pharma.

Hindalco lost almost 1.% ahead of its numbers to be declared later today. Kingfisher Airlines rallied another 5% in trade today, after surging 20% on Monday and hitting the circuit filter.

Markets are expected to watch key data points during the week. India's inflation data is to be released later today. The figure is keenly watched as it sets the tone for a prospective repo rate cut. Economists are expecting July inflation to come in at around 7.25%.

Germany's second quarter GDP will be released today. It is expect to come in at around 0.2%. In the US the producer price index is also due later.

Markets are expected to move in a tight range, until the inflation data is released around 11.00 am.

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