Reuters Market Eye - The BSE auto index rose for a sixth straight session to a new all-time high, on expectations sales will improve after an interest rate cut is seen bringing down the cost of loans.
Production has also normalised at India's biggest car maker Maruti Suzuki (MRTI.NS) after recent labour unrest, which is also contributing to the gains in the sub-index.
"With production restored at Maruti , and with interest rates going down, car makers are expected to post 14-15 percent sales growth i n FY13 over FY12"said Yaresh Kothari, sector analyst at Angel Broking.
"Maruti, Tata Motors are expected to be the main beneficiaries of RBI's cut" Kothari added.
Tata Motors(TAMO.NS) rose 2.5 percent, while Maruti Suzuki(MRTI.NS) advanced 2.1 percent.
The BSE's auto index has risen over 30 percent in 2012, compared to a 12.5 percent rise in the Sensex.
(Reporting by Abhishek Vishnoi; Editing by Rafael Nam)