Reliance Capital shares rallied 10.41 per cent, while Max India rose by 10.05 per cent on the BSE.
Shares of Bajaj Finserv gained 3.15 per cent, while Religare Enterprises was up 1.97 per cent.
Finance Ministry is contemplating raising FDI cap in insurance sector from 26 per cent to 49 per cent with some riders like restriction on voting right.
"We might increase FDI cap in insurance without commensurate increase in voting rights. We talked with stakeholders and also held high level meeting in ministry," a senior ministry official said.
The official further said that the government may raise the FDI cap in the sector gradually beginning with non-life and health followed by life insurance segment.