Extending its gains to the seventh straight session, the 30-share BSE Sensex jumped 524.51 points or 0.88 per cent to close at 59,831.66.
The rupee consolidated in a narrow range and settled 5 paise higher at 82.35 (provisional) against the US dollar on Tuesday.
In all, RBI has raised benchmark rate by 1.90 per cent since May this year.
Sun Pharma, Mahindra & Mahindra, Dr Reddy's and Power Grid were among the winners.
After jumping nearly 560 points during the session, the 30-share BSE index ended 37.70 points or 0.07 per cent lower at 57,107.52. Similarly, the NSE Nifty shed 8.90 points or 0.05 per cent to close at 17,007.40.
Mahindra & Mahindra, Bajaj Finance, Hindustan Unilever, State Bank of India, and Nestle were major gainers on the Sensex.
The BSE benchmark ended 412.96 points or 0.68 per cent lower at 59,934.01 on Thursday. The Nifty dipped 126.35 points or 0.7 per cent to settle at 17,877.40.
At close, Sensex ended 455.95 points or 0.76 per cent up at 60,572.08, and Nifty closed up 133.70 points or 0.75 per cent at 18,070.05.
In the three-day rally, Sensex advanced 1,086 points, while Nifty gained nearly 312 points.
All the 30 stocks on the Sensex ended in green.
BSE LargeCap Index rose 0.16 per cent, whereas BSE SmallCap and MidCap index rose 0.83 per cent and 0.80 per cent, respectively.
The rupee recovered early losses to close flat at 79.84 (provisional) against the US dollar on Monday amid a strong greenback overseas and massive sell-off in equities.
BSE midcap ended up 0.64 per cent, whereas BSE SmallCap and BSE LargeCap closed 0.53 per cent and 0.71 per cent, respectively.
Mahindra & Mahindra, Maruti Suzuki India, Asian Paints, Hindustan Unilever, Ultratech Cement and HDFC, among others, were the major gainers on the BSE.
At close, Sensex ended up 130.18 points or 0.22 per cent at 59,462.78, while Nifty closed 39.15 points or 0.22 per cent higher at 17,698.15.
By 1 p.m., Sensex was trading up 175.73 points or 0.30 per cent at 58,475.53, and Nifty was trading 45.75 points or 0.26 per cent higher at 17,427.75.
Investors also stayed on the sidelines ahead of the RBI's policy meet outcome on Friday.
The 30-share BSE benchmark jumped 619.27 points to 57,477.06. The broader NSE Nifty advanced 189.15 points to 17,118.75.
The rupee appreciated 26 paise to close at 79.65 (provisional) against the US dollar on Thursday, tracking a firm trend in the domestic equities.
The 30-share BSE Sensex fell 306.01 points or 0.55 per cent to settle at 55,766.22 dragged down by index heavyweight Reliance Industries.
The broader NSE Nifty climbed 114.20 points or 0.69 per cent to 16,719.45.
From the Sensex pack, Reliance Industries, Maruti, ICICI Bank, ITC, HDFC and State Bank of India were the major gainers in early deals.
Weakness in index majors Reliance Industries and ICICI Bank also weighed on the domestic equity markets.
In the broader markets, the BSE midcap, large-cap and smallcap gauges slipped much as 1.72 per cent.
The rate hike comes on the back of a 40 basis points increase effected by RBI at an unscheduled meeting on May 4.
At 10.02 a.m., Sensex was 1.1 per cent down at 55,037 points, whereas nifty down 1.1 per cent at 16,388 points.
The 30-share BSE Sensex rallied 693.56 points to 55,578.22 in early trade. The broader NSE Nifty jumped 213.75 points to 16,566.20.
The rupee inched 3 paise higher to close at 77.53 (provisional) against US dollar on Friday, supported by a rebound in domestic equities.
Gold price in the national capital on Tuesday jumped Rs 388 to Rs 50,282 per 10 gram, reflecting rally in international precious metal prices, according to HDFC Securities.
The rupee pared its initial gains and settled just 1 paisa higher at 77.49 (provisional) against US dollar on Friday, as inflation concerns and strength of the American currency weighed on the local unit.
Snapping its two-day losing streak, the rupee appreciated 12 paise to end at 77.32 (provisional) against the US dollar on Tuesday, supported by a rebound in regional currencies and fall in crude oil prices.
Rupee too took a breather as it has appreciated from its all-time low of 77.42 the previous day to 77.25 this morning.
The move came just ahead of the Federal Reserve's policy decision, with analysts expecting a similar move by the US central bank as well as the focus shifts to combating runaway price rise, exacerbated by geopolitical tensions.
The rupee pared initial gains to settle almost flat against the US dollar on Monday as subdued domestic equities offset the impact of a sharp decline in global crude oil prices.
The 30-share BSE benchmark was trading 648.25 points lower at 56,412.62. The NSE Nifty declined 185.3 points to 16,917.25.
The rupee pared initial losses to settle 4 paise higher at 76.53 (provisional) against the US dollar on Thursday, tracking positive domestic equities.
Foreign institutional investors continued their selling spree, offloading shares worth Rs 2,461.72 crore on Friday, according to stock exchange data.
Foreign institutional investors continued their selling spree, offloading shares worth a net Rs 3,009.26 crore on Wednesday, according to stock exchange data.
The rupee declined 6 paise to close at 76.25 (provisional) against the US dollar on Monday, tracking the strength of the greenback overseas and elevated crude oil prices.
The key index was dragged down by heavyweights Infosys and HDFC Bank amid weak trend in Asian markets.