It's a release of several chemicals and hormones... I honestly don't remember which... but it's the neurochem part of the bonding process. It happens with non-parents as well when they hold infants *usually*. ((Just like the old dating trick of a single man pushing a baby carriage or having a puppy in the park)). Ditto something happens with the infants of most mammals to mammals of *other* species as long as they're not hungry. ((AKA why you can find a dog nursing a kitten... and why we get all gooey inside with ducklings even though we're chasing ducks off with sticks and bb guns.)) There've been several studies that relate to both neurotransmitters and hormone release between humans and infants... I just don't remember any of the finer details.
As one of my psych profs used to say "Babies survive on charm. OTW no one would want to deal with them."
And "charm" is a physiological response... of many facets. Even including pupil dilation (when someone's pupils widen it means they're happy or aroused... aka they like us... and babies pupils are dilated *most* of the time... but that's only one trigger amongst scores of them; facial expression/ pheramones/ tons of schtuff).