Dec 5 (Reuters) - India's stock benchmarks recovered from a muted start on Friday, led by domestic rate-sensitive sectors such as financials and auto stocks, after the Reserve Bank of India lowered key interest rates by 25 basis points.
The Nifty rose 0.25% to 26,097 and the Sensex added 0.23% to 85,455.06 as of 10:07 a.m. IST.
Both indexes had swung between 0.2% gains and losses ahead of the decision.
The RBI lowered its key repo rate on Friday as record low retail inflation and a benign outlook for prices provided room to further support economic growth.
Heavyweight financials rose 0.5%, while banks and auto gained 0.3% each after the rate cut decision. Rate-sensitive realty stocks gained 0.8%.
The broader small-caps fell 0.6%, while mid-caps traded flat.
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sonia Cheema, Sumana Nandy and Nivedita Bhattacharjee)
By Bharath Rajeswaran
