Sensational Index 80K: With Budget on horizon, bulls hit new milestone in T20 style

"The increase in weightage of in the MSCI Index is expected to lead to inflows worth around $4 billion," said Andrew Holland, CEO, Avendus Capital Alternate Strategies, pointing out that are underweight on banks.

Markets are anticipating an by the Fed in the current year, which will be supportive for IT earnings as the sector has bottomed out, he said.

"The market is expecting a good budget and, as seen historically, a pre-budget rally can be expected," said Sandeep Raina, executive vice president, research, Nuvama Professional Clients Group. "The global factors have also turned supportive after the US Fed said that inflationary pressure has reduced." The US central bank said Tuesday that the country's economy is on a "disinflationary path" but more data is required before cutting interest rates to verify whether the readings are a correct representation of the big economic picture.

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In India, banking stocks led the rise. HDFC Bank advanced 2.2% and recorded a lifetime high of ₹1,791.9 on BSE.

The Bank Nifty rose 1.8% to a high of 53,256.70. and ended 2.37% and 2.07% higher, respectively, while and rose over 1.5% each. was up 3.55%, making it the biggest gainer on the Nifty. rose 2.39%.

"The long-short ratio is at 82%, which indicates FIIs (foreign institutional investors) are at heavy long positions and the markets witnessed this impact," said , deputy VP, technical research, Anand Rathi Shares and . "This implies that markets are highly overbought, and some profit booking is likely at higher levels."

Markets have moved up around 1,000 points in seven-eight trading sessions and, based on option data, once the top of the rally is made, 24,500 to 25,000 could be resistance levels, he said.

"There is further upside potential of 2-3% post which profit booking is likely," said Kothari. "Wild swings can be witnessed..."

Foreign portfolio investors (FPIs) bought shares worth a net Rs 5,483.63 crore on Wednesday while their domestic counterparts sold to the tune of Rs 924.43crore.

The BSE Mid-cap 150 index advanced 0.86% while the Small-cap 250 index ended 0.85% higher. Out of the 4,021 stocks traded on the BSE, 2,295 rose, 1,640 declined and 86 were unchanged.

In Asia, Hong Kong rose 1.18%, Taiwan was up 1.28%, and South Korea advanced 0.47%. Indonesia gained 1.01% and China declined 0.49%.

"If the markets continue moving higher ahead of the budget, then the risk-reward ratio would be more towards the downside," said Holland.

Raina said that corrections in the range of 1-2% are expected. However, the rally is likely to resume after these as several levers such as policy continuity, earnings and further deployment of funds are still to play out.

"While the markets are witnessing stock rotation, investors are (advised to) stick to stocks or sectors from an investing perspective since trading is difficult in the current markets," said Raina.