BENGALURU, Dec 26 (Reuters) - Indian shares rose on Tuesday, tracking gains in some Asian stocks, after cooler-than-expected U.S. inflation data boosted bets of interest rate cuts by the Federal Reserve next year.

The blue-chip NSE Nifty rose 0.42% to 21,439.95 points, while the S&P BSE Sensex was 0.32% higher to 71,331.43 as of 10:24 a.m. IST.

However, the gains were limited by a 0.53% decline in information technology (IT) stocks after Infosys fell following the termination of a $1.5 billion deal focused on artificial intelligence.

"Given that Indian equities have gained in the past few sessions and even hit record highs and as we are in the fag end of the year, by and large the trading activity is expected to be muted," said Saurabh Jain, assistant vice president of research (retail equities) at SMC Global Securities.

U.S. stocks were mixed on Friday as investors headed into the Christmas holiday weekend, having digested cooler-than-expected inflation data.

Asian stocks started the week higher, with MSCI's index of Asia-Pacific shares outside Japan rising 0.42%, although Japan's Nikkei traded lower.

Markets are pricing in a 75% chance of the Fed cutting rates by 25 basis points in March, according to the CME FedWatch tool, compared to a 21% chance at the end of November.

At home, both the Nifty and Sensex lost about 0.5% last week, snapping their longest weekly winning streak in six years as some investors booked profits.

Still, the blue-chip indexes have gained 12.65% and 12.07% over the last seven weeks, helped by strong domestic macroeconomic data, a return of foreign inflows, and moderation in oil prices.

Among individual stocks, Inox Wind rose 3.2% after the company won an order for its wind turbine generators. (Reporting by Rama Venkat in Bengaluru; Editing by Varun H K)