L.T.
My son is 3. Sometimes he hits and pushes his little sister (2 y.o.). We use timeouts and talk alot about feelings - when you push Megan it makes her sad and sometimes it hurts her, etc. I also am quick to praise him when he is gentle with her and gives her hugs. We talk about how that makes her happy and how it is the right way to treat someone. It seems to be working pretty well. He comments when he notices people are happy, sad, or mad. He says, "Poor Megan. Let me kiss your booboo" when she gets hurt. He seems to be trying to please others.
My son isn't in a daycare or other group setting without me, so I haven't faced your particular issue. But I wonder if he is acting out in response to something. Has he been in daycare for a while or is this a relatively new arrangement? Does he have a new teacher at the daycare? Has anything changed at home that he could be responding to?
Good luck!