Indian shares opened higher on Tuesday, as sentiment was lifted by data showing domestic retail inflation for November eased below the RBI's tolerance limit, although focus will now be on the U.S. inflation data due later in the day.

The Nifty 50 index was up 0.18% at 18,529.80, as of 09:20 a.m. IST, and the S&P BSE Sensex rose 0.14% to 62,218.81.

India's annual retail inflation eased to 5.88% in November from 6.77% in October, amid softer rise in food prices, government data showed on Monday, bolstering expectations of a slower pace of interest rate hikes. Analysts in a Reuters poll had predicted a November reading of 6.40%.

Retail inflation had been above the upper end of the Reserve Bank of India's (RBI) 2%-6% tolerance band since January, prompting the central bank to raise rates by 225 basis points, including a 35 basis points increase last week.

Investors will now focus on the U.S. inflation data due at 7:00 p.m. IST (1330 GMT) and the Federal Reserve's rate decision, scheduled to release later this week.

Wall Street equities advanced overnight as investors took an optimistic stance hoping that the now-hefty pace of increases in interest rates will finally slow.

Asian markets were off to a mixed start on Tuesday, with the MSCI Asia ex Japan rising 0.11%.

All the major domestic sectoral indexes barring the Nifty FMCG advanced at the open, with Nifty Metal and Nifty Auto rising the most with 0.5% gains each, respectively.

Tata Motors was the top gainer in Nifty 50, rising nearly 1.5%, after the company said it was exploring sale of a portion of its 74.43% stake in Tata Technologies through an IPO. ($1 = 82.6340 Indian rupees) (Reporting by Bharath Rajeswaran in Bengaluru; Editing by Eileen Soreng)