At 1:02 p.m., Sensex was up 872 points or 1.10 per cent at 80,242, and Nifty was up 224 points or 0.93 per cent at 24,405.

The market rally was driven by banking stock. Nifty Bank was up 606 points or 1.22 per cent at 51,405.

Nifty midcap 100 index was up 503 points or 0.91 per cent at 55,777, and Nifty smallcap 100 index was up 228 points or 1.28 per cent at 18,075.

All sectors were trading in the green. The major gainers were auto, PSU Bank, fin service, pharma, FMCG, metal, realty, energy, and commodities.

In the Sensex, ICICI Bank, M&M, IndusInd Bank, JSW Steel, Wipro, Nestle, Tata Motors, Tata Steel, HUL, Asian Paints, SBI, TCS, Sun Pharma, HCL Tech and Power Grid were major gainers. Kotak Mahindra Bank, Axis Bank, Tech Mahindra and HDFC Bank were major losers.

Market experts said that the trend of flight to quality is likely to be sustained given the good numbers from banking majors like HDFC Bank and ICICI Bank where valuations continue to be fair. Investors can profit from these polarised valuations.

"The global market structure may turn favourable after the subdued Israeli strikes against Iran avoiding the Iranian oil fields which have resulted in a sharp drop in crude prices. The imminent US presidential elections and the uncertainty associated with that will continue to weigh on markets," they added.

The foreign institutional investors (FIIs) sold equities worth Rs 3,036 crore on October 25, while domestic institutional investors bought equities worth Rs 4159 crore on the same day.