Sensex, Nifty outlook for tomorrow: What lies ahead for the stock market?

Indian equity benchmarks settled slightly higher in a volatile session on Wednesday, snapping a sharp four-session losing streak amid selective buying in heavyweight counters. Moving ahead, investors are expected to closely track geopolitical developments, crude oil prices, foreign fund flows and movement in the rupee for further market direction.

The 30-share BSE Sensex pack gained 49.74 points or 0.07 per cent to close at 74,608.98, while the NSE Nifty50 index rose 33.05 points or 0.14 per cent to settle at 23,412.60.

Broader markets outperformed the headline indices, with Nifty Midcap 100 climbing 0.77 per cent and Nifty Smallcap 100 advancing 0.31 per cent.

Sector-wise, metals, energy and FMCG stocks showed resilience, whereas IT and auto counters remained under pressure.

Ajit Mishra – SVP (Research) at Religare Broking, said, "The market witnessed a volatile yet relatively stable session today following the sharp sell-off seen over the previous four trading sessions. Nifty opened on a weak note amid mixed global cues and persistent concerns surrounding elevated crude oil prices but gradually recovered during the session on selective buying in heavyweight counters. However, selling pressure resurfaced in the latter half, trimming most of the gains, and the index eventually ended marginally higher."

He added, "However, investor sentiment remained cautious amid ongoing geopolitical uncertainty surrounding the US-Iran conflict and persistent foreign institutional outflows. Market participants also reacted to the government's decision to raise import duties on gold and silver, which led to sharp moves across bullion-linked counters and ETFs. Meanwhile, stock-specific action driven by earnings announcements continued to dominate individual pockets of the market."

From a technical perspective, Mishra stated, "Nifty rebounded after hitting an intraday low of 23,262 and has nearly filled the gap around 23,150 level. Overall, the index is likely to face selling pressure on rebounds towards the 23,600–23,700 zone, and participants should align their positions accordingly. On the sectoral front, traders may continue to find opportunities on both sides of the market, though we maintain our preference for pharma, healthcare, metals, and energy counters for long trades."

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Nandish Shah, Deputy Vice-President at HDFC Securities, noted, "Market breadth improved meaningfully, with the BSE advance-decline ratio at 1.36, indicating renewed buying interest after the sharp profit booking seen over the last few sessions."

He added, "The Indian rupee weakened for a fourth straight session and closed at a record low as the US dollar continued its steady ascent. Despite the government's move to raise gold and silver import duties to discourage purchases, the currency remained under pressure amid sustained foreign capital outflows."

Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities, said, "The market is closely watching expected government measures aimed at curbing imports and supporting the rupee amid pressure from elevated crude prices and rising import bills. Despite intermittent recovery attempts, sentiment remains cautious as the rupee continues to trade under pressure near lifetime weak zones. Near-term rupee range is seen between 95.45–96."