Equity benchmark indices gained nearly one per cent on Wednesday as the Reserve Bank of India kept repo rate unchanged at 4 per cent and maintained 10.5 per cent growth projection for FY22.
Moreover, the International Monetary Fund has projected India's GDP to grow at 12.5 per cent in FY22.
The BSE SandP Sensex closed 460 points or 0.94 per cent higher at 49,662 while the Nifty 50 edged higher by 136 points or 0.92 per cent to 14,819.
All sectoral indices at the National Stock Exchange were in the positive terrain with Nifty PSU bank up by 2 per cent, auto by 1.4 per cent, financial service by 1.1 per cent and IT by 1 per cent.
Among stocks, JSW Steel was up by 5.3 per cent to Rs 566.10 per share.
State Bank of India gained by 2.2 per cent, SBI Life by 2.1 per cent and ICICI Bank by 1.9 per cent The other prominent winners were Britannia, Nestle India, Bajaj Auto, Hero MotoCorp, Wipro and Bharti Airtel.
However, Adani Ports fell by 1.9 per cent to close at Rs 819 per share.
The others which lost were Titan, Tata Consumer Products, UPL, Hindustan Lever and Tata Motors.
Meanwhile, a gauge of Asian shares climbed to three-week highs as investors eyed the upcoming earnings season for further signs of a global economic recovery.
Besides, the IMF raised its global growth forecast to 6 per cent this year from 5.5 per cent, reflecting a rapidly brightening outlook for the US economy.
MSCI's broadest index of Asia Pacific shares outside of Japan was up by 0.3 per cent for its second straight day of gains.
Japan's Nikkei was 0.12 per cent higher while South Korea's Kospi added 0.33 per cent.
Hong Kong's Hang Seng index fell by 0.91 per cent as technology stocks dipped.