Shares in auto companies gain on hopes the government will decide against implementing an excise duty on diesel vehicle sales.
The tax proposal was considered after the government backed off initial plans to raise the price of diesel.
Executives from Tata Motors , Maruti Suzuki , Mahindra & Mahindra and Ford argued against increasing the excise duty at a meeting with finance ministry officials on Wednesday.
The government has asked for production data on diesel cars and will make a final call after further deliberations.
Tata Motors shares rise 1.1%, Maruti Suzuki gains 2.8%, and Mahindra & Mahindra gains 1%, extending a rally this week sparked by hopes for interest rate cuts.