India’s benchmark equity index rebounded from a seven-day decline as investors weighed the outlook for economic growth against inflationary pressures a day after the central bank kept borrowing costs unchanged.
The S&P BSE Sensex rose 1% to 34,413.16 at the close in Mumbai, rebounding from its lowest close since January 4. The Nifty 50 Index also advanced 1%. Both gauges fell on Wednesday after India’s monetary policy committee flagged inflationary risks from an expansionary federal budget.
“The RBI’s balanced approach mixing optimism on both global and local growth, as well as caution on rising crude oil prices, is soothing investor sentiment,” said Soumen Chatterjee, head of research at Guiness Securities Ltd.
Sun Pharmaceutical Industries Ltd gained the most on the Sensex, adding 6.3% as the rupee held near its weakest against the dollar in eight weeks. Infosys Ltd, Asia’s second-largest software services company that gets more than two-thirds of its sales abroad, led gains among major software exporters. Mortgage lender Housing Development Finance Corp added 1.5%, snapping four days of losses.
A measure of healthcare, realty and basic materials companies led advances in all but one of 19 sectoral sub-indexes compiled by BSE Ltd. The central bank’s monetary policy statement on Wednesday highlighted the need to support growth, while its inflation forecast of 4.5% to 4.6% for the second half of the fiscal year starting April 1 was seen as benign by traders. 
On the currency front, the Indian rupee strengthened by two paise to close at 64.26 against the US dollar from its previous close at 64.28.