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Even though the benchmark indices are trading at record highs the broader markets have outperformed as investors are now seen bargain hunting in the mid-cap and small-cap segments.
The broader markets hit record highs after better-than-expected GDP growth in the first quarter ended June 30, 2014, which stood at 5.7 per cent as compared to 4.6 per cent growth in the previous quarter.
The BSE's benchmark Sensex has gained 203 points, or 0.7 per cent to 26,841, while the 50-share Nifty has added 65 points, or 2.3 per cent to 8,020. However, in the broader market, BSE small-cap index has gained 1.2 per cent and the BSE mid-cap index has climbed 1 per cent.
The current rally is because of aggressive buying from foreign funds and participation of domestic mutual funds. They have purchased approximately Rs 60,000 crore since May 9. Strong corporate earnings for the quarter ended June further boosted the sentiment.
FII inflow stood at Rs 44,426 crore ($7.4 billion), while mutual funds invested a net of Rs 14,012 crore in Indian equities between May 9 and August 28, data from the Securities and Exchange Board of India showed.
Among the top gainers today, Natco Pharma surged 5% to Rs 1267, also its 52-week high on the BSE, after the pharmaceutical company announced that its marketing partner in the USA, Mylan Inc. has filed an Abbreviated New Drug Application (ANDA) for a three-times-aweek generic Copaxone and has been accepted by the US Food and Drug Administration (USFDA).
Other mid-cap gainers on the BSE include Ess Dee Aluminium, Unitech, Kansai Nerolac Paints and Apollo Tyres all surging between 5-10 percent.
The overall breadth of the BSE Mid-cap index remains firm as 185 stocks are advancing while 49 are declining while 303 shares advanced in the Small-cap index and 136 shares declined.
