Mumbai, Aug 5 (PTI) Stock market benchmark index Sensex traded higher, while the Nifty quoted flat on Wednesday after the RBI kept key interest rates unchanged for the third time in a row this financial year.

The 30-share BSE Sensex climbed 246.79 points to 78,675.74 in late morning trade. The 50-share NSE Nifty, however, quoted 22.30 points down at 24,590.85.

The indices have been facing divergence since Monday after stock exchanges introduced a new auction mechanism for shares having futures and options (F&O) contracts.

The Closing Auction Session (CAS) in the equity cash segment became operational on Monday, introducing a new auction-based mechanism for determining the closing prices of eligible stocks in a move aimed at making the price discovery process more transparent and robust.

Meanwhile, in an expected move, the Reserve Bank of India on Wednesday kept key interest rates unchanged for the third time in a row this financial year as it weighed the impact of uncertain energy prices and supply disruptions caused by the ongoing West Asia crisis.

Announcing the third bi-monthly monetary policy for the current fiscal, RBI Governor Sanjay Malhotra said the Monetary Policy Committee (MPC) has unanimously decided to retain short-term lending rate or repo rate at 5.25 per cent with a neutral stance.

From the Sensex pack, Mahindra & Mahindra, UltraTech Cement, Trent, State Bank of India, InterGlobe Aviation and Larsen & Toubro were among the major winners.

Bharat Electronics, Tata Consultancy Services, Sun Pharma and Reliance Industries were among the laggards.

Brent crude, the global oil benchmark, traded 0.79 per cent lower at USD 78.72 per barrel.

Foreign Institutional Investors (FIIs) bought equities worth Rs 2,446.47 crore on Tuesday, according to exchange data.

In Asian markets, South Korea's KOSPI jumped 4.19 per cent and Japan's Nikkei 225 index climbed 3.61 per cent. Shanghai's SSE Composite index and Hong Kong's Hang Seng index were also trading higher.

US markets ended sharply higher on Tuesday.

In the previous session, the Sensex declined 210.08 points, or 0.27 per cent, to settle at 78,428.95. The Nifty dropped 159.40 points, or 0.64 per cent, to end at 24,614.90. PTI SUM ANU