From the Nifty basket of shares, 39 ended higher while 12 ended on a negative note.
Shares of India's leading manufacturer of cement and ready mixed concrete, ACC rallied as much as 7.86 per cent to hit fresh 52-week high of Rs 1,614.40.
Sctoral indices such as realty, capital goods oil & gas, power and bank lead the recovery.
A rate-tightening move would be the RBI's first such since January 2014, when previous governor Raghuram Rajan was responding to a rupee crisis that had sent the currency to record lows.
Among Nifty stocks, Sun Pharma was the top loser, down 2.33 per cent followed by Bank of Baroda and ITC, which fell over 2 per cent each.
Sentiments also got a boost after Bank of Japan said it will keep accommodative policy in place.
The broader Nifty gained 0.36 per cent to 9,136.40, after dropping for five straight sessions. The benchmark BSE Sensex closed 0.29 per cent or 85.82 points higher at 29,422.39.
Shares of private lender Yes Bank plunged after the asset quality of the bank slipped in the Q4 results.
Nifty on Wednesday ended with losses for fifth day in a row as investors cautiously await earnings of the Indian corporates.
Shares of the country's largest software exporter TCS today rose 1.27 per cent to Rs 2,338 after the company yesterday reported a 4.2 per cent growth in net profit at Rs 6,608 crore for the quarter ended March 2017.
BSE Sensex and Nifty struggled in early trade on Wednesday amid weak global markets. Gains in IT stocks such as TCS, Infosys and HCL Tech supported the market at lower levels.
During Tuesday's sessions, State Bank of India shares rose 2.33 per cent to Rs 296.40 and ONGC lost 1.36 per cent to Rs 180.60.
Among Nifty stocks, Tata Steel was the biggest loser, down 2.7 per cent followed by Ambuja Cements, Coal India, Eicher Motors, Bharti Infratel, which fell between 2-2.5 per cent.
Reliance Industries, which today briefly became the most valued Indian company, fell over 1 per cent to drag benchmark indices lower.