Benchmark indices Nifty and Sensex opened the trading session on a strong note, extending their gains for a third trading session on the bourses as uptick in IT, Realty, and FMCG stocks helped bolster sentiment. The two mirrored robust trends from the US market where the small-cap Russell 2000 index hit an all-time high after Scott Bessent was nominated U.S. Treasury Secretary.

At about 9:30 am, the Sensex was up 250.53 points or 0.31 percent at 80,360.38, and the Nifty was up 81.90 points or 0.34 percent at 24,303.80. About 2137 shares advanced, 758 shares declined, and 103 shares unchanged.

"The staggering victory of the ruling NDA alliance in Maharashtra should bring the undercurrents back in the markets. With elections now behind, we expect the government to focus on spending after it came down 17 percent on-year in the first half, " Narendra Solanki, Head of Fundamental Research at Anand Rathi Shares and Stock Brokers. "We need to see how the recovery takes place as investors are aware of all negatives in the market. Geo-political risks still linger and we need to see how those unfold," he added.

In a remarkable reversal, foreign institutional investors turned net buyers for the first time in 38 days and lapped up almost Rs 10,000 crore in the cash markets yesterday. However, traders suggest that most of the buying came due to the Morgan Stanley Capital International (MSCI) quarterly rejig. According to experts, Indian equities are expected to witness a net inflow of around $2.5 billion in FII passive flows.

All sectoral indices traded in the positive with Nifty and Realty rising over a percent each. A sharp rise in realty stocks comes after Jefferies said it remains optimistic about the real estate sector, citing a six-month high in residential sales during October, driven by robust festive demand. According to the firm, value sales are trending 20 percent higher, supported by favorable pricing and an improved mix. Nifty Metal and FMCG followed next. Major names such as Hindalco, Tata Steel, and Adani Enterprises lifted the index higher.

The mid and smallcap indices, also known as the broader market, outperformed the benchmarks and posted gains of 0.5 and 0.6 percent, respectively. The two have outperformed the headline indices by posting gains of 21 percent since the start of the year. The NSE Nifty has gained just over 11 percent over the same period. Solanki suggests that the small-midcap space has seen a decent fall and now slight buying could emerge although it will be stock-specific.

Defence stocks like BEL surged in trade after JPMorgan initiated coverage of Indian defence stocks foreseeing a long runway of structural growth for the sector. While the firm assigned 'overweight' calls for Bharat Electronics and Hindustan Aeronautics, industry peer Mazagon Dock Shipbuilders received a 'neutral' rating. JPMorgan also anticipates strong growth in defense production as well as exports, which makes these stocks an even more lucrative bet.

Premier Energies also darted up over 2 percent after the company received multiple orders aggregating Rs 1,087 crore from two large Independent Power Producers (IPP) and one other customer. Last month, the company's subsidiaries Premier Energies International Private Ltd and Premier Energies Photovoltaic Private Ltd — secured multiple orders, cumulatively worth Rs 765 crore.

"Over the last two sessions, Nifty has staged a robust recovery, retesting its 100-day EMA near 24,350. A decisive close above this level could pave the way for further upside toward the 24,550-24,750 zone. On the downside, the 23,850-24,000 range is expected to provide strong support in case of any pullback," Ajit Mishra, Senior Vice President at Religare Broking said. "Traders and investors are advised to focus on sectors showing relative strength, such as IT and Banking while remaining selective in others," he added.

Infosys, BEL, Tech Mahindra, Asian Paints, and Tata Steel were the top gainers on the Nifty. Bajaj Finserv, IndusInd Bank, Axis Bank, Bajaj Auto, and L&T were the top laggards.