MUMBAI (Reuters) - Indian markets recovered after falling briefly on Tuesday after the Reserve Bank of India (RBI) kept interest rates unchanged, as sentiment improved on hopes it would cut interest rates early next year.
The RBI kept interest rates unchanged at 8.0 percent on Tuesday as widely expected, staying focused on containing inflation while adopting a more dovish tone in response to the government's call for help to revive economic growth.
Traders said a rate cut in early 2015 was more or less certain now unless global commodity prices moved adversely.
The benchmark 10-year bond yield was at 8.02 percent at 0547 GMT, after earlier rising to as much as 8.11 percent.
The NSE Bank index turned positive after earlier dropping as much as 0.5 percent. Shares gave up most losses to trade largely flat on the day.
(Reporting by Mumbai Markets Team; Writing by Swati Bhat; Editing by Biju Dwarakanath)
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