Sensex and Nifty, the two key equity benchmarks, on Friday bounced back after falling for the previous seven trading sessions and zoomed sharply after the Reserve Bank of India's (RBI’s) 50 basis point rate hike to 5.9 per cent cheered domestic investors.


In a bid to check inflation, the RBI on Friday raised the benchmark lending rate, which has remained above its tolerance level for the past 8 months. In all, RBI has raised the benchmark rate by 1.90 per cent since May this year.


The BSE Sensex jumped 1,016 points (1.80 per cent) to settle at 57,426. During the day, it rallied 1,312.67 points (2.32 per cent) to 57,722. On the other hand, the broader NSE Nifty climbed 276 points (1.64 per cent) to end at 17,094.


On the 30-share Sensex platform, Bharti Airtel, IndusInd Bank, Bajaj Finance, Titan, Kotak Mahindra Bank, HDFC Bank, and Tata Steel were among the major gainers. However, Dr Reddy's, Asian Paints, ITC, and Hindustan Unilever were the laggards.


Among sectors, the Nifty PSU Bank and Private Bank indices advanced around 3 per cent each, followed by the Nifty Metal, and Financial Services indices, up 2 per cent each.


In broader markets, Nifty SmallCap 100 and Nifty MidCap 100 indices rose 0.9 per cent each. Volatility gauge, India VIX, meanwhile, slipped over 5 per cent.


"The Monetary Policy Committee (MPC) delivered 50 bps hike in line with expectations," said Madhavi Arora, Lead Economist at Emkay Global Financial Services.


In the previous session on Thursday, the BSE Sensex fell 188 points (0.33 per cent) to settle at 56,409 points. The Nifty dipped 40.50 points or 0.24 per cent to end at 16,818.10 points.


"The 50 bps rate hike by the RBI in today's meeting was in line with expectations. The key highlights were the resilience shown by the Indian economy considering the turbulent global environment and concerns emanating from global growth slowdown and hawkish stances of various central banks," said Santosh Meena, Head of Research at Swastika Investmart Ltd.


Elsewhere in Asia, markets in Seoul, Tokyo and Shanghai ended lower, while Hong Kong settled higher. Stock exchanges in Europe were trading in the green in mid-session deals. The US markets had ended sharply lower on Thursday.


Meanwhile, the international oil benchmark Brent crude futures jumped 1.19 per cent to $89.54 per barrel.


Foreign institutional investors offloaded shares worth a net Rs 3,599.42 crore on Thursday, according to data available with the BSE.