Continuing its early upward trend, the benchmark BSE Sensex rallied by almost 120 points as rate-sensitive stocks surged soon after the Reserve Bank cut interest rate by 0.25 per cent on Tuesday.
The 30-share index, which had gained over 159 points in the opening trade, was trading higher by 119.45 points, or 0.42 per cent, to 28,362.74 at 1445 hours. The barometer had gained 415.76 points in the previous two sessions.
The wider National Stock Exchange index Nifty too gained 31.25 points, or 0.36 per cent, to 8,769.35. The BSE banking index was up 0.32 per cent to 22,468.25, while the realty index rose 0.81 per cent to 1,570.19. Brokers said the RBI's decision to cut repo rate by 0.25 per cent to 6.25 per cent was largely in line with market expectations and influenced trading sentiment.
RBI Governor Urjit Patel in his first policy review, announced 0.25 per cent cut in its key policy rates, the first reduction in six months, to 6.25 per cent. All six members of the Monetary Policy Committee (MPC) voted in favour of a rate cut. Among banking stocks, state-run SBI was up 0.76 per cent to Rs 277.15, ICICI Bank gained 1.15 per cent to Rs 259 and HDFC Bank was up 0.12 per cent to Rs 1288.35. The central bank also retained the growth projection at 7.6 per cent for the current fiscal.