The rally extended beyond the benchmarks, with the BSE Midcap index gaining 0.1 percent and the BSE Smallcap index up 0.6 percent. All 13 sectoral indices were in the green with Nify Auto, Pharma, and PSU Bank rising by over a percent.

The Indian stock market surged to new heights on September 23, with Sensex and Nifty 50 opening at record levels, extending last week's gains. Automobile and banking stocks were the ones to lead the rally in the benchmarks.

The Sensex reached a historic milestone of 84,843, while Nifty 50 hit a fresh peak of 25,903. At 9.20 AM, Sensex was up 200 points or 0.2 percent at 84,749 and Nifty 50 was up 90 points 0r 0.4 percent at 25,881.

Indices managed to close at an all-time high in the previous session and FIIs pumping in over 14,000 crores of money in a single day indicate that upward bias is strong, said Shrey Jain, Founder and CEO of SAS Online. "Bank Nifty closing at record highs in the previous session indicates that we are seeing fresh money moving to finance, banking and related stocks," he said.

Nirav Karkera, Head of Research at Fisdom, pointed to ongoing domestic retail buying as another key driver but cautioned that rising valuations could spark concerns. "As markets soar due to inflows, there may be concerns over valuations," he told Moneycontrol.

Some experts see more upside in the short term. However, Deepak Jasani, Head of Retail Research at HDFC Securities, suggested that the sharp rise in indices might lead to consolidation, with Nifty expected to face resistance at 25,980 and find support at 25,445 in the near term.

The rally extended beyond the benchmarks, with the BSE Midcap index gaining 0.1 percent and the BSE Smallcap index up 0.6 percent. All 13 sectoral indices were in the green with Nify Auto, Pharma, and PSU Bank rising by over a percent.

However, the India VIX, a key measure of market volatility, rose by 7 percent to 13.7.

"Interestingly, while headline indices are performing well, stock-level uptake isn't as strong, suggesting FII flows are focused on a narrow set of stocks in the indices. It might take time for this strength to reach stocks outside the headline indices," added Karkera. He believes it could take time for this bullishness to filter down to a broader range of stocks.

M&M, NTPC, SBI, Bharti Airtel, and Divis Labs led the Nifty 50 gainers, rising 1.4-2 percent. On the other hand, Infosys, LTIMindtree, Eicher Motors, Hindalco, and ICICI Bank were among the laggards, down 0.2-1.2 percent.

Adani Total Gas surged nearly 7 percent after securing $375 million in global debt financing for network infrastructure. Vodafone Idea jumped 10 percent following the conclusion of its capex plans.

US stocks ended nearly flat on September 20, as investors took a breather following a strong rally sparked by the Federal Reserve's larger-than-expected rate cut. Meanwhile, Asia-Pacific markets were mostly in the green today as investors processed recent monetary policy moves from Japan and China, alongside the Fed's aggressive rate reduction last week. Markets in Japan were closed for a public holiday.

Source: moneycontrol