Identify the correctly punctuated sentence.

The correctly punctuated sentence is "It’s a sunny day." In this case, "It’s" is a contraction for "it is," which is appropriate in the context of this sentence as it conveys a casual and conversational tone. The use of the apostrophe indicates that two words have been combined, which is standard in English for contractions.

On the other hand, the other choices demonstrate either a lack of punctuation or incorrect forms. One option lacks the apostrophe and thereby misuses the possessive form "its," which denotes ownership but doesn’t fit the context here. Another option incorrectly uses "its'" with an apostrophe placed incorrectly for a possessive term. Lastly, while "It is a sunny day" is grammatically correct, it does not utilize a contraction and is more formal in tone compared to the contracted form. Thus, "It’s a sunny day" is the most suitable choice for the given context.