BSE Sensex gains 0.17 percent. The broader NSE Nifty index rises 0.4 percent, after earlier touching its highest intraday level since November, 2010 of 6187.30 earlier in the session.
Continued hopes for rate cuts are driving the rally: ICICI Bank shares gain 1.65 percent, Bank of Baroda shares up 1 percent and State Bank of India up 2.1 percent.
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Oil India Ltd gains 1 percent after MSCI included the company in its India and Emerging Markets indexes.
MSCI also added three other stocks to its MSCI India index: Apollo Hospitals, up 6.5 percent, Wockhardt Ltd , up 1.3 percent, and GlaxoSmithKline Consumer Healthcare, up 6.8 percent.
However, Bajaj Auto Ltd falls 0.4 percent after its March-quarter margins came in lower than consensus expectations.