The equity benchmarks were trading over a half per cent higher on Friday after the Reserve Bank of India (RBI) left benchmark interest rate unchanged at 4 per cent but retained an accommodative stance. In addition to this, the announcement led to a surge in rate-sensitive bank, financial and realty stocks.

The BSE Sensex was up 300 points to hit 40,490 mark while the NSE Nifty hovered around 11,900 level.

At 1.20 p.m., Sensex was trading 283.74 points higher at 40,466.41 levels while the Nifty was at 11,903.70, up by 69.10 points.

HDFC was the top gainer in the Sensex pack, rising over 3 per cent.

Bank counters also witnessed buying with ICICI Bank, Bandhan Bank, Axis Bank, HDFC Bank, SBI and Kotak Mahindra Bank trading up to 3.51 per cent higher.

The BSE Bank index rose by over 2 per cent following gains in its components.

The reverse repo rate will also continue to earn 3.35 per cent for banks for their deposits kept with RBI.

Shares of LIC Housing Finance jumped nearly 10 per cent and Repco Home Finance gained 7.76 per cent.

Also, GIC Housing Finance, Indiabulls Housing Finance, AU Small Finance Bank, PNB Housing Finance were trading with up to 7 per cent gains.

Following rally in these companies, BSE Finance index was quoting with over 2 per cent gains.

From the realty pack, companies witnessed a mixed trend while the index was trading 0.79 per cent higher. Counters like Indiabulls Real Estate and DLF rose up to 1.5 per cent.

However, auto index was in the red.