Benchmark indices bounced back on Friday after falling for the previous seven trading sessions, with the Sensex climbing 1,017 points following the Reserve Bank of India's interest rate decision.
The RBI on Friday raised the benchmark lending rate by 50 basis points to 5.90 per cent in a bid to check inflation, which has remained above its tolerance level for the past 8 months. In all, RBI has raised the benchmark rate by 1.90 per cent since May this year.
Bouncing back after seven straight sessions of decline, the 30-share BSE benchmark jumped 1,016.96 points or 1.80 per cent to settle at 57,426.92. During the day, it rallied 1,312.67 points or 2.32 per cent to 57,722.63.
Similarly, the broader NSE Nifty climbed 276.25 points or 1.64 per cent to end at 17,094.35.
"The Monetary Policy Committee (MPC) delivered 50 bps hike in line with expectations," said Madhavi Arora, Lead Economist at Emkay Global Financial Services.
Among the 30-share Sensex pack, Bharti Airtel, IndusInd Bank, Bajaj Finance, Titan, Kotak Mahindra Bank, HDFC Bank, and Tata Steel were among the major gainers.
However, Dr Reddy's, Asian Paints, ITC, and Hindustan Unilever were the laggards.
"The 50 bps rate hike by the RBI in today's meeting was in line with expectations. The key highlights were the resilience shown by the Indian economy considering the turbulent global environment and concerns emanating from global growth slowdown and hawkish stances of various central banks," said Santosh Meena, Head of Research at Swastika Investmart Ltd.
Elsewhere in Asia, markets in Seoul, Tokyo, and Shanghai ended lower, while Hong Kong settled higher.
Stock exchanges in Europe were trading in the green in mid-session deals.
The US markets had ended sharply lower on Thursday.
Meanwhile, the international oil benchmark, Brent crude futures jumped 1.19 per cent to $89.54 per barrel.
Foreign institutional investors offloaded shares worth a net ₹3,599.42 crore on Thursday, according to data available with BSE.