BENGALURU: Indian shares retreated from all-time highs on Friday, after the country's central bank kept interest rates at record lows while also retaining its accommodative stance.

The Reserve Bank of India kept rates steady, as widely expected, and reiterated that it will continue to support the recovering economy by ensuring ample rupee liquidity in the banking system.

The NSE Nifty 50 index was up 0.5% at 14,969 by 0441 GMT, while the S&P BSE Sensex gained 0.64% to 50,958.96. Both the indexes had hit record highs early on Friday.

Meanwhile, the Indian rupee strengthened to 72.94 against the dollar following the central bank's announcement.

"The MPC's (monetary policy committee) decision is more or less in line with expectations. There was nothing in the announcement to help propel the markets higher," said Neeraj Dhawan, director at Quantum Securities in New Delhi.

"Banking stocks are helping the indexes to hold on to gains and we are seeing some profit-taking as markets were at high valuations."

Gains on the Nifty 50 were supported by State Bank of India , which surged as much as 15% to a record high. The lender on Thursday reported a 7% fall in its quarterly net profit, but beat analysts' estimates.

The Nifty PSU Bank index, which tracks state-run lenders jumped 6.5%, while the Nifty Banking index added nearly 3%.

Benchmark indexes, which closed at record highs on Thursday, are set to see a weekly gain of over 9% on optimism around the measures announced in the federal budget.

The RBI has already cut its key interest rate by a total 115 basis points since March 2020 to revive growth and cushion the impact of the COVID-19 pandemic.

The health crisis is expected to trigger India's biggest annual economic contraction in decades, and high inflation remains a cause of concern.