Benchmark equity indices Sensex and Nifty turned highly volatile trade in early trade on Friday ahead of the announcement of the RBI monetary policy.

The 30-share BSE benchmark Sensex declined 75.16 points to 81,690.70 in early trade. The NSE Nifty dipped 25.45 points to 24,682.95.

Both the benchmark equity indices were later trading between highs and lows.

From the 30-share pack, Tata Consultancy Services, Tata Motors, Larsen & Toubro, Reliance Industries, UltraTech Cement and HDFC Bank were among the laggards.

ITC, Power Grid, Mahindra & Mahindra, ICICI Bank, Adani Ports and Bharti Airtel were among the gainers.

Foreign Institutional Investors (FIIs) bought equities worth Rs 8,539.91 crore on Thursday, according to exchange data.

In Asian markets, Seoul and Tokyo were trading lower while Shanghai and Hong Kong quoted in the green.

US markets ended lower on Thursday.

"FIIs turning buyers in December, in total reversal of their sustained selling strategy during the last two months, has altered the market sentiments in favour of the bulls. Encouraged by the FII buying, retail investors, too, have jumped onto the buying bandwagon. This has triggered short-covering leading to sharp intra-day volatility," V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said.

The policy response of the RBI and the central bank’s commentary on growth and inflation outlook will be keenly watched by the market today, Vijayakumar added.

Global oil benchmark Brent crude dipped 0.10 per cent to USD 72.02 a barrel.

Rallying for the fifth day running, the 30-share BSE benchmark jumped 809.53 points or 1 per cent to settle at 81,765.86 on Thursday. The Nifty surged 240.95 points or 0.98 per cent to 24,708.40.

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