The Reserve Bank kept the repo rate unchanged at 6 per cent as widely expected but lowered retail inflation projection to 4.7-5.1 per cent for the first half of the fiscal. Adani Ports, Cipla, Reliance Industries, Bajaj Finance, Sun Pharma were the other prominent gainers in the Nifty.
However, there was a twist in the tale as markets nosedived in the late afternoon session on the back of some fresh worries arising on the trade war between the United States and China. In the February meeting, the bank's Monetary Policy Committee had voted for a pause in the monetary policy with the exception of RBI executive director Michael Patra who voted for a 25 basis points hike.
The wider National Stock Exchange index Nifty too maintained its upward march and closed at 196.75 points, or 1.94% higher at 10,294.35 soon after the RBI policy announcement.
Minutes into trading, it was quoting at 33,411.74 points, up by 392.67 points, or 1.19 per cent. The broader Topix index closed with similar gains.
The Sensex was down by 351.56 points or 1.05 per cent at the Wednesday's closing. China's main market, the Shanghai Composite Index, closed down 0.15 percent to end the day at 3,131.84 points, erasing some healthy gains earlier in the session.
The tension could also be felt on the Chinese yuan, which suffered its biggest daily fall versus the dollar in two weeks.
Sameet Chavan, chief analyst-technical & derivatives, Angel Broking, said: "For the coming session, the immediate hurdle is placed in the zone of 10187-10230 and on the downside, last Wednesday's low of 10096 would be a crucial support". The rebound on Wall Street came as traders shook off trade war concerns that had weighed on the markets at the outset. The DAX of Germany lost 0.37% and the CAC 40 of France dipped 0.20%.