REUTERS - India's stock markets edged higher on Friday, on track to post their first weekly gain in five as defensive stocks such as Infosys rose amid uncertainty over a U.S. rate hike next week and domestic monsoon deficit.
India's June-September monsoon, which irrigates nearly half of the country's farmlands, has started withdrawing from the north-western region, which could increase the rainfall deficit for the season.
The market also received support from higher Asian shares following strength in Wall Street while the dollar steadied.
"People are positioning on Fed related caution. There is a growing belief that central bank governor would like to see how Fed plays before any decision," said G. Chokkalingam, founder of Equinomics, a Mumbai-based research and fund advisory firm.
The BSE Sensex gained 0.2 pct, while the Nifty rose 0.17 percent, heading towards their first weekly gain since Aug. 7, a month marked by China led global rout inducing redemptions from emerging markets.
Traders also await monthly industrial output data, due later in the day, and inflation figures on Monday for further direction.
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The Reserve Bank of India (RBI) has lowered rates by a total 75 basis points since January with three cuts. However, it left the policy repo rate on hold at 7.25 percent at its last meeting, tying future cuts to the inflation outlook.
Indian consumer inflation was expected to have slowed to a record-low in August, hit by slack global energy costs and low food prices, a Reuters poll found, likely increasing pressure on the central bank to cut rates at its meeting later this month.
Among defensive stocks, Infosys rose 1.2 percent, ITC gained 0.6 percent, while Sun Pharmaceutical Industries advanced 0.5 percent.
(Reporting by Abhishek Vishnoi in Mumbai; Editing by Anand Basu)