Shares in pharmaceutical companies such as Dr.Reddy's Laboratories Ltd gained 4.7 percent after hitting an all-time high of 2,000 rupees on hopes that growth in the domestic market would remain strong, analysts say.
"Last 2-3 days several reports say pharma industry is likely to grow at 13 percent in the current year, so it gives confidence that industry remain on a sound footing even when there is slowdown elsewhere," says Ranjit Kapadia, an analyst tracking the sector at Centrum Broking.
Delay in drug policy is another positive which adds to the momentum, Kapadia added.
Sun Pharmaceutical Industries Ltd also gained 3.12 percent. Lupin also rose 1.65 percent.