Indian shares closed 0.52 percent higher Monday, as banking stocks turned volatile ahead of a policy review by India’s central bank, with rates expected to be hiked, dealers said.

The benchmark 30-share Sensex index rose 74.17 points to 14,349.11, snapping two straight days of losses.

“The markets were cautious, anticipating the RBI to hike rates tomorrow,” said a dealer with brokerage Jamnadas Morarjee, referring to the Reserve Bank of India.

Last Thursday, India’s inflation slowed marginally to a slightly lower-than-expected 11.89 percent for the week ended July 12, still way above the RBI’s declared comfort level of five percent. Economists expect the RBI to hike the repo rate by 25 basis points to 8.75 percent and the cash reserve requirement by 25 basis points to nine percent. Trading sentiment was subdued at the Mumbai stock exchange on Monday amid high security across the city, after last week’s terror attacks in high-technology capital Bangalore and the western city of Ahmedabad. Gainers led losers 1,767 to 845 on volume of 45.96 billion rupees ($1.08 billion).

The rupee fell against the dollar to 42.33 from 42.23 and was flat against the euro at 66.4. India’s largest bank State Bank of India fell 30.7 rupees or 2.12 percent to 1,418.05 a day ahead of the RBI monetary policy, while private sector Axis Bank fell 15.3 rupees or 2.15 percent to 697.2.

India’s state-run oil exploration firm Oil and Natural Gas Corp (ONGC) rose 29.5 rupees or three percent to 1,012.5 ahead of its first quarter earnings later Monday. India’s largest private sector firm Reliance Industries rose 31.75 rupees or 1.48 percent to 2,179.1. afp