Shares in state-run oil marketing companies surge after the government allows them to set diesel prices, despite uncertainty about the specifics of the announcement.

Hindustan Petroleum Corp gains 8.9 percent, after touching its highest level since October 2011, while Bharat Petroleum Corp gains 5.9 percent, and Indian Oil Corp is up 7.8 percent.

HPCL has gained 12.1 percent in 2013, as of Wednesday's close, adding 11.95 billion rupees to its market cap.

"Worst time for refineries companies is by and by coming to an end. Refineries shares are quoting at ridiculous valuation," said Vijay Kedia, director at Kedia Securities, talking about their low valuations.

HPCL ends up 5.4 pct, BPCL ends up 3.7 pct, IOC ends up 6.4 pct.