Equity benchmarks posted smart gains on Friday after three days of losses as the RBI kept the policy rate unchanged at a record low and maintained its accommodative stance but flagged inflationary pressures amid the Russia-Ukraine war.
The BSE Sensex climbed 412.23 points or 0.70 per cent to settle at 59,447.18. Similarly, the NSE Nifty gained 144.80 points or 0.82 per cent to finish at 17,784.35.
ITC was the top performer in the Sensex pack, spurting 4.36 per cent, followed by M&M, Dr Reddy's, Titan, Reliance Industries, Asian Paints and Tata Steel.
In contrast, Tech Mahindra, Maruti, NTPC, HCL Technologies, Sun Pharma, HDFC twins and Bharti Airtel were the laggards, slipping as much as 1.31 per cent.
The Reserve Bank of India (RBI) on Friday kept borrowing costs unchanged at a record low for the 11th time in a row in a bid to continue supporting economic growth despite inflation edging higher in the aftermath of Russia's war in Ukraine.
RBI's six-member Monetary Policy Committee voted to hold the benchmark repurchase or the repo rate at 4 per cent, Governor Shaktikanta Das said.
The panel decided to stick to an accommodative stance "while focussing on withdrawal of accommodation to ensure that inflation remains within the target going forward while supporting growth".
The RBI raised the retail inflation projection for the current financial year to 5.7 per cent from earlier forecast of 4.5 per cent, though it expects moderation in prices of cereals and pulses on a likely record harvest of winter season (rabi) crop.
"Market was cautious during the last 2-3 days ahead the RBI meet and its future policy stance. Measures being in-line with market expectations led to a relief rally. The focus has shifted to the Q4 earnings season, which will start next week, initiated by the IT and Banking sector," said Vinod Nair, Head of Research at Geojit Financial Services.
On a weekly basis, the Sensex slipped 170.49 points or 0.28 per cent, while the Nifty shed 113.90 points or 0.64 per cent.