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Indian shares reversed early losses on Thursday, after the Reserve Bank of India kept key policy rates unchanged "to assess the progress made so far" in tackling inflation.

The Nifty 50 was up 0.30% at 17,610.20 as of 11:01 a.m. IST, while the S&P BSE Sensex rose 0.32% to 59,882.93. Both the benchmarks had fallen 0.3% ahead of the RBI's rate decision.

Citing 'turmoil in global economy and unprecedented uncertainty in geopolitics', RBI governor Shaktikanta Das maintained policy rates and added that the central bank remained watchful of the outlook and impact of policy measures on the broader economy.

The RBI was widely expected to raise rates by 25 basis points (bps) to take the repo rate to a seven-year high of 6.75%, and then pause for the rest of the year.

"The RBI MPC surprised with a pause," said Radhika Rao, senior economist, DBS Bank, Singapore and emphasised that the RBI will be "nimble to address evolving inflationary risks", going forward.

Ten of the 13 major sectoral indexes advanced, with rate-sensitive sectors climbing the most after the policy decision.

Financials rose 0.3%, public sector banks jumped 1.5% after the policy announcement.

Realty stocks also jumped over 2%. All the 10 constituents advanced. RBI's decision to pause its rate hike is "indeed good for residential real estate market", according to Anuj Puri, Chairman of ANAROCK Group.

"This decision particularly gives relief to affordable and mid-segment home buyers who feared a possible rate hike today."

Among individual stocks, Cholamandalam Investment and Finance jumped 7% after logging 65% YoY rise in disbursements for March quarter to about 210.2 billion Rupees.

On the flip side, shares of Avenue Supermarts fell over 3% after global brokerage firm Citi reiterated "sell" on the stock after the company's Q4 business update.

The Nifty 50 has risen over 1.3% this week so far.

Indian markets will remain closed for Good Friday.