Domestic stock markets registered mild gains amid cautious trade on Thursday, with the S&P BSE Sensex gaining over 200 points at day's high and the broader NSE Nifty benchmark trading near the 10,900 mark.

In its third bi-monthly policy review of 2019-20 on Wednesday, the RBI's Monetary Policy Committee (MPC) cut the repo rate - the key interest rate at which it lends short-term funds to commercial banks - by 35 basis points to a nine-year low of 5.40 per cent.

It lowered its economic growth forecast to 6.9 per cent from 7 per cent for the current fiscal year, and said it sees inflation remaining inside its target range over a 12-month horizon.

The RBI highlighted that liquidity in the system was in a large surplus over the past two months.

Analysts expect the currency to move in a narrow range in the near term. "The RBI and government are making a concerted effort to push growth. The worst of expectations are already factored in," forex advisory firm IFA Global said in a note.

Foreign fund outflows and rising crude oil prices weighed on the rupee.

Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs 383.66 crore on Wednesday, provisional data from the NSE showed.

Crude oil prices jumped by more than $1.5 a barrel on Thursday, recovering half of the nearly 5 per cent losses in the previous session, on expectations that lower prices may lead to production cuts. Brent crude futures - the global benchmark for crude oil - rebounded to $57.75 a barrel at one point on Thursday, up 2.7 per cent from their previous close.

The dollar index - which gauges the greenback against six peers - was flat in afternoon.