The BSE Sensex edged up on Tuesday after falling for eight consecutive sessions. The 50-share Nifty benchmark traded above the key 5,900 mark, but the rupee traded weak against the dollar.
Analysts make a case for a much need rebound as the benchmark indices have hit their lowest this year after a sharp correction. The earnings season has not thrown negative surprises and the government continues to focus on reforms and fiscal consolidation. The next trigger for stock markets is the Budget, due later this month.
"5,900 is a critical level and there have been no put unwinding of 5,900... We are cautiously optimistic," K Subramanyam, AVP (institutional sales) at Asit C Mehta Investment Intermediaries said.
Market analyst Avinash Gorakshakar said markets may continue trading in the tight range.
"5,800-5,850 are the possible downsides, but we need continuity on reforms for major upsides," he added.
December IIP would be a key trigger for intraday trade. According to a Reuters poll, Industrial production (IIP) likely rose an annual 1.1 per cent in December after shrinking 0.1 per cent in November.
The Sensex traded 56 points or 0.30 per cent higher at 19,516 while the Nifty advanced 12 points to 5,910 as of 09.40 a.m.
PSU stocks were up 1 per cent led by sharp gains in state-run explorer ONGC, which jumped 2.35 per cent on Q3 earnings. Car maker Maruti Suzuki was the other stock that traded with over 1 per cent gains on the Nifty.
Among the Nifty losers, Jaiprakash Associates shares were down 1.5 per cent on disappointing Q3. Jindal Steel and Power shares were down 1.4 per cent ahead of Q3 numbers. IT major Infosys and drug maker Cipla saw profit taking and traded with over 1 per cent losses.
Unitech shares plunged 20 per cent after the CBI removed its lawyer in the 2G spectrum allocation scam case for allegedly colluding with Unitech's managing director Sanjay Chandra, who is an accused in the scam. (Read full story here