Benchmark equity indices Sensex and Nifty closed higher by more than half a per cent on Wednesday following buying in IT, financial and oil stocks after the RBI slowed down the pace of interest rate hikes.

Ending its two-day slide, the 30-share BSE Sensex rebounded by 377.75 points or 0.63 per cent to close at 60,663.79 with 24 of its constituents posting gains.

The broader Nifty of the NSE spurted by 150.20 points or 0.85 per cent to settle at 17,871.70, riding on a rally in Adani Enterprises, Adani Ports and HDFC Life.

Vinod Nair, Head of Research at Geojit Financial Services said, "Bulls took charge of the markets as the RBI’s MPC meeting delivered a smaller rate hike in line with market expectations. The RBI has taken a more optimistic view on domestic growth by increasing the GDP forecast while cautiously keeping CPI inflation at 5.3 per cent for FY24".

Among Sensex stocks, Bajaj Finance rose the most by 3.14 per cent. Ultratech Cement, Reliance Industries, Infosys, Wipro, HCL Tech, TCS, Bajaj Finserve, Tata Motors, Tech Mahindra, Titan and Maruti were among the major gainers.

L&T declined the most by 1.62 per cent, followed by Bharti Airtel, Axis Bank, Kotak Bank and Hindustan Unilever.

The Reserve Bank of India slowed the pace of interest-rate increases for the second straight time when it on Wednesday expectedly increased borrowing costs by 25 basis points.

The RBI also projected retail inflation to ease to 5.3 per cent in the next fiscal from 6.5 per cent this year on assumptions of lower imported inflation.

It also upped its GDP growth estimate to 7 per cent from 6.8 per cent for FY23 and pegged the growth at 6.4 per cent for the next fiscal.

Shares were mixed in Asia on Wednesday after US stocks rallied following comments by the Federal Reserve chair signalling that a strong jobs report would not by itself sway its stance on interest rates hikes.

Hong Kong, Sydney and Seoul rose while Tokyo and Shanghai declined. US futures edged lower while oil prices were little changed.

Foreign Institutional Investors (FIIs) were net sellers in the capital market on Tuesday as they offloaded shares worth Rs 2,559.96 crore, according to exchange data.

Except for the headline, this story has not been edited by The Telegraph Online staff and has been published from a syndicated feed.