Indian stocks rose sharply on Monday, with the Bombay Stock Exchange Sensex climbing 377 points to close at 28,243.29 and the National Stock Exchange Nifty gaining 126.95 points to end the day at 8,738.10, NDTV reported. The market rally came even as the newly-established Monetary Policy Committee began its first meeting to discuss the Reserve Bank of India's benchmark interest rate and inflation, PTI reported.

Banking and auto stocks witnessed the biggest gains of the day as expectations for a rate cut by the RBI rose. The share prices of IndusInd Bank, Axis Bank and the State Bank of India increased by 1.5% to 3%. Also, stocks of Maruti Suzuki Ltd gained by 4.43% after it reported a 31% rise in the sale of vehicles during the month of September. Investor confidence was boosted after gains in Asian and European markets, as well.

However, experts said they do not expect the Monetary Policy Committee to issue a rate cut, keeping in mind the current levels of inflation. The experts believe committee chairperson and RBI Governor Urjit Patel is unlikely to change his views on price rises. The six-member panel will make its first review public on Tuesday afternoon.

The MPC was set up with an amendment to the Reserve Bank of India Act, 1934, through the Finance Act 2016. Each member will have a vote, while the RBI governor will have casting vote in case of a tie. MPC members are not eligible for reappointment to the committee. They include three academics, a deputy governor of the central bank and another RBI representative, besides the governor.