Mumbai, Feb 6 Indian markets traded higher after the RBIs Monetary Policy Committee on Thursday said the policy space for future action is "available" indicating a rate cut in the near term.
The central bank kept the repo rate unchanged in its February policy meeting citing elevated levels of inflation.
Private Banks edged up slightly after the announcement. RBL Bank, IndusInd Bank, Bank of Baroda, SBI and Axis Bank gained over 2 to 5 per cent on the NSE. The Nifty PSU Bank index gained over 2.5 per cent led by Canara Bank.
At 1 p.m., the Sensex was trading higher by 208.18 points at 41,350.84. It opened at 41,209.13 but fell to an intra-day low of 41,113.11 ahead of the policy rate announcement. The broader Nifty also gained 61.60 points was trading at 12,150.75.
"It was an expected move by the RBI, maintaining the repo rate unchanged at 5.15 per cent. With the inflation rate breaching the upper band, it will take time for the central bank to revive the rate cuts. By maintaining the accommodative stance, there is scope for rate cuts once the inflation rate falls back to a comfortable level," said Deepthi Mary Mathew, of Geojit Financial Services.
( With inputs from IANS )