Brokers said the RBI's decision to keep key interest rate unchanged was largely in line with investor expectations.
Overall gains remained capped as oil prices slid almost 5 percent to a one-month low on data showing an unexpected increase in US inventories of crude and gasoline stocks. While, BSE mid-cap Index closed up by 0.2% at 14834 whereas, BSE small-cap Index closed up by 0.2% at 15472. Shares of GAIL, Bharti Airtel, ICICI Bank, SBI, Hero Motocorp, M&M, Bajaj Auto and Tata Steel were trading in the positive zone, with gains of up to 0.93%.
European stocks ended Wednesday's choppy session marginally lower even as banks turned in an impressive performance after Spain'sBanco Popular was acquired by Banco Santander.
The BSE Sensex also on Wednesday closed nearly 81 points higher at 31,271.28, buoyed by the RBI's status quo on policy rates and a revised estimate of a good monsoon.
The IT sub index of NSE-Nifty IT-fell 1.4 per cent.
It touched a high of 31,354.51 points and a low of 31,193.77 points during intra-day trade. The policy will support banks to lend more due to the advantage of 50 bps cut in SLR.
Sector-wise, the S&P BSE banking index rose by 193.07 points, the automobile index by 167.90 points, and the healthcare index by 148.51 points.
The market sentiment took a short-term reversal in the absence of any meaningful fresh domestic triggers and also concerns of stretched valuation.
The gauge had gained 80.72 points in the previous session on better monsoon forecast and the status quo on policy rates by the RBI yesterday. Similarly, the broader NSE 50-share Nifty also followed the suit, opening at a new high of 9,704.25 and gained further ground to hit a new high of 9,709.30. After shuttling between 9,678.55 and 9,630.55, it finally settled 26.75 points higher at 9,663.90.