At 3:30 PM, BSE Sensex ended higher by 37 points to 32,869 and the NSE Nifty50 Index gained by 6 points to 10,128.
On Thursday, the Sensex had rallied 352 poins to close at 32,949.21 while the Nifty finished at 10,166.70.
Indices were also supported by gains in shares of banks, automobiles and metal companies.
Interest-sensitive stocks took a beating, dragging the BSE banking index down by 0.49 percent.More news: Bayonetta 3 Announced As A Nintendo Switch Exclusive
The central bank kept the economic growth forecast unchanged at 6.7 percent for the fiscal ending March 31. The Sensex and the Nifty had fallen in six of the previous seven sessions.
The top Nifty gainers included GAIL (+8.57%), Tech Mahindra (+5.13%) and UPL (+4.97%).
Meanwhile, foreign portfolio investors offloaded shares worth net Rs 333.59 crore, while domestic institutional investors (DIIs) bought shares to the tune of Rs 776.18 crore on Tuesday, as per provisional data.
PSU Bank Nifty rose 1.25 per cent led by lenders such as Bank of India, Oriental Bank, Syndicate Bank and SBI on expectations that the government would soon reveal details of a recapitalisation plan. Results are due later this month.More news: Kate Middleton steps out wearing lovely Diana hand-me-down
"Today is largely seen as a corrective recovery in the market because it had gone into an oversold territory", said Deven Choksey, promoter, KR Choksey.
"On the macro front upcoming RBI policy and Gujarat state election will be an influential factor for investors which is steering the market to consolidate", said Vinod Nair, Head of Research, Geojit Financial Services. Participants sensed value-buying opportunities after the equities' recent lacklustre run, making stock valuations attractive, according to market participants.
Indian stock market extended gains from Thursday, on positive cues from other Asian equities and U.S. markets overnight. MSCI's broadest index of Asia-Pacific shares outside Japan was barely changed.
Japan's Nikkei led the way as the yen eased on the dollar, rising 1.1 per cent on top of Thursday's 1.45 per cent bounce to be nearly back where it started the week. Paris CAC fell 0.29% and Frankfurt's DAX shed 0.13%.More news: Ingram's game-winner lifts Lakers past Sixers
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