Most Indian stocks rose after the nation’s central bank cut the liquidity ratio requirement for banks and left interest rates unchanged for a second straight meeting as retail inflation quickened.

State Bank of India climbed for a second day. Tata Steel Ltd. (TATA) and Steel Authority of India Ltd. rose at least 2 percent after Press Trust of India reported the Odisha state allowed eight iron-ore mines to reopen after the Supreme Court’s order. Tractor maker Mahindra & Mahindra Ltd. (MM) lost 1 percent.

Three stocks rose for every two that fell on the S&P BSE Sensex (SENSEX), which added 0.2 percent to 24,734.16 at 11:35 a.m. in Mumbai. Governor Raghuram Rajan cut the proportion of deposits lenders need invest in government debt to 22.5 percent from 23 percent, the Reserve Bank of India said in a statement today. Rajan kept the repurchase rate at 8 percent, as forecast by all 38 analysts in a Bloomberg survey.

“By cutting the SLR the RBI has created a little headroom in case credit growth picks up,” Aneesh Srivastava, chief investment officer with IDBI Federal Life Insurance Co., said by phone from Mumbai.

The RBI said further policy tightening won’t be warranted if consumer-price inflation stays on course to hit 8 percent in January 2015 and 6 percent a year later. If disinflation is faster than anticipated “it will provide headroom for an easing of the policy stance,” it said.

Modi’s landslide win last month is spurring optimism that he’ll take steps to reduce price pressures and lead a recovery among the world’s biggest emerging markets, which are forecast to grow at the slowest pace since 2009. India must move toward fiscal discipline to lower inflation, curb the budget deficit and spur growth, Finance Minister Arun Jaitley said June 1.

The Sensex has risen 17 percent this year on expectations the strongest election win in three decades will enable Prime Minister Narendra Modi to take steps to revive economic growth. The gauge is valued at 15.2 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s multiple of 10.7, data compiled by Bloomberg show.

Overseas investors bought a net $ 522.7 million of Indian shares on May 29, the first inflow in a week, according to data compiled by Bloomberg. That extended this year’s purchases to $ 8.1 billion, the most among eight Asian markets tracked by Bloomberg.

To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net

To contact the editors responsible for this story: Michael Patterson at mpatterson10@bloomberg.net Ravil Shirodkar, Hari Govind