The BSE Sensex edged higher on Wednesday as recently-hit stocks such as Infosys recovered, while Cairn India and HDFC rose on market talk index provider MSCI will increase the weighting of the two by its November review.
However sentiment remained largely cautious with the recent period of volatility expected to continue as more companies line up to report their earnings, including ACC and Ambuja Cements on Thursday.
Corporate earnings and the Reserve Bank of India's policy review on October 30 are seen as the next big triggers for markets, given continued concerns about the outlook for economic growth and the continued threat of sovereign rating downgrades.
"Given the recent rally and most participants expecting GDP growth of 5.5 to 6 percent, what market needs is earnings support," said Aneesh Srivastava, chief investment officer at IDBI Federal Life Insurance.
"But the way the political environment and interest rates are today, it will be difficult for markets to substantially move ahead," he added.
The BSE Sensex rose 0.18 percent, or 33.07 points, to 18,610.77 points.
The Nifty rose 0.22 percent, or 12.25 points, to 5,660.25 points.
Recently battered shares recovered on Wednesday. Infosys Ltd rose 0.6 percent after shares had fallen 7 percent in the previous three sessions after the technology services provider disappointed investors with its earnings outlook.
Larsen & Toubro gained 1.3 percent after falling 2.9 percent in the previous three sessions.
Also gaining on Wednesday, Housing Development Finance Corp rose 1.2 percent while Cairn India gained 1.8 percent.
A source at MSCI told Reuters the weighting of both stocks are expected to change by later this year, attributing the reasons to recent block deals and private placements by the two companies.
Carlyle Group raised $841 million by selling its remaining 3.7 percent stake in HDFC, while Cairn Energy CLE.L raised about $922 million by selling an 8 percent stake in Cairn India.
Drug maker Lupin rose 2.92 percent after receiving U.S. Food and Drug Administration approval for generic Avapro tablets for treating hypertension.
However, cement makers ACC fell 1.25 percent, while Ambuja Cements dropped 3 percent after TV news channel ET Now reported the companies may provide a 2 percent royalty on sales to parent company Holcim, citing unnamed sources.
ACC declined to comment on the report, while Ambuja did not respond to questions from Reuters. The two companies are set to post earnings results on Thursday.
Reliance Industries fell 0.9 percent on expectations the energy conglomerate will not be able to sustain a rebound in refining margins in the July-September quarter, and on concerns about valuations after a recent rally.
HCL Technologies fell 0.7 percent, retreating from a 12-year high hit earlier in the session after posting a 78 percent jump in quarterly profit.
JSW Steel fell 2.8 percent after India's federal police agency named senior company officials among the accused in a case related to illegal iron ore mining in the southern state of Karnataka.
JSW called the charges "without basis."