Indian shares extended gains on Wednesday as the central bank left its key interest rates unchanged as expected, and promised adequate policy support to help sustain a durable economic recovery amid worries around the Omicron coronavirus variant.

By 0543 GMT, the NSE Nifty 50 index had gained 1.37 per cent to 17,412.2 and the benchmark S&P BSE Sensex had risen 1.41 per cent to 58,447.39

The benchmark 10-year bond yield fell to a session low of 6.357 per cent soon after the decision, while the rupee weakened to 75.45 against the dollar.

“The [monetary policy] committee is of the view that the sharp and sustained reduction in new Covid-19 infections and the rise in vaccination coverage are contributing to consumer confidence and business optimism,” Reserve Bank of India (RBI) Governor Shaktikanta Das said in his policy address.

Continued policy support is required for a durable economic recovery, he said, adding that, “We want to ensure a soft-landing that is well-timed.”

The RBI said it would continue to manage liquidity “in a manner that is conducive to entrenching the recovery and fostering macroeconomic and financial stability”.

The central bank left the key lending rate, or the repo rate, steady at 4 per cent and the reverse repo rate, or the borrowing rate, unchanged at 3.35 per cent.

“The recent rebound in Indian equities has already discounted the RBI decision, but it would help in stabilising the markets going forward amid the global uncertainty,” said Ajit Mishra, vice president of research at Religare Broking.

The Nifty 50 and the Sensex both have shed about 4 per cent since the RBI’s last meeting in October, weighed down by fears over high valuation and as investors waited for more clarity on just how much economic disruption Omicron might cause.

Among sectors, the Nifty IT index rose as much as 2.3 per cent on Wednesday, led by Wipro Ltd and Infosys Ltd, up as much as 3.2 per cent and 2.8 per cent respectively.