Benchmark equity indices climbed in early trade on Thursday ahead of the RBI policy decision to be announced later in the day.
Fresh foreign fund inflows also added to the optimism in the equity market.
The 30-share BSE Sensex climbed 85.64 points to 63,228.60 in early trade. The NSE Nifty advanced 25.55 points to 18,751.95.
From the Sensex pack, NTPC, Power Grid, Tata Motors, Tata Steel, Asian Paints, Larsen & Toubro, IndusInd Bank and UltraTech Cement were the major gainers.
Kotak Mahindra Bank, Axis Bank, HCL Technologies, Wipro, Tech Mahindra, Tata Consultancy Services and Bajaj Finance were among the laggards.
In Asian markets, Seoul, Tokyo, Shanghai and Hong Kong were trading lower.
The US markets ended mostly lower on Wednesday.
"Domestically, the important cue to watch would be the RBI commentary today," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Global oil benchmark Brent crude dipped 0.25 per cent to USD 76.76 a barrel.
Foreign Institutional Investors (FIIs) bought equities worth Rs 1,382.57 crore on Wednesday, according to exchange data.
The Sensex had climbed 350.08 points or 0.56 per cent to settle at 63,142.96 on Wednesday. The NSE Nifty advanced 127.40 points or 0.68 per cent to end at 18,726.40.
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