Indian shares to start higher, Reliance Comm eyed

MUMBAI (Reuters) - Indian shares should start higher on Monday, with Reliance Communications in the spotlight after it called off tie-up talks with South Africa's MTN Group late on Friday.

Higher Asian stock markets will underpin sentiment, but political uncertainties as India's parliament begins a two-day special session on a vote of confidence could keep investors edgy.

Shares in Reliance Communications are expected to rise after the mobile operator ended talks with MTN to create a top-10 global telecom firm, avoiding a potential head-on legal clash between members of its founding Ambani family.

"Some more upside is seen as markets take comfort from rising Asian stocks," Arun Kejriwal, strategist at research firm KRIS, said. "But the question is can we sustain the rally."

The main stock index had risen 8.4 percent in the last two trading sessions, boosted by slower-than-expected inflation and falling global oil prices.

Oil, India's biggest import, was trading below $130 a barrel after coming off last week from record highs above $147.

The 30-share BSE index rose 4 percent on Friday to 13,635.40, its highest close in a week. It gained 1.2 percent last week but is down a third so far this year.

Asian stocks rose sharply on Monday after a smaller-than-expected loss at Citigroup provided comfort about the financial sector's stability.

By 0330 GMT, the MSCI index Asia-Pacific markets outside of Japan was up 3 percent. Japan was shut for a local holiday.

The Nifty futures traded in Singapore was up 1.9 percent.