The Indian stock market opened lower amid elevated crude oil prices. However, renewed diplomatic efforts involving Iran ahead of key Israeli and US votes could influence geopolitical sentiment. Nifty 50 opened 44.4 points lower at 22,708.80 from the previous day's close, while Bank Nifty started at 54,420.70, up 54 points. Sensex edged down by 122.37 points to 72,484.38.

The broader markets outperformed sharply, with the Nifty Midcap index adding 1.2% and the Smallcap index gaining 1.4%. The Indian rupee opened marginally higher at Rs. 95.16 per dollar on Tuesday versus the previous close of Rs. 95.19.

Foreign institutional investors (FIIs) returned to selling in Indian equities on Monday, offloading a net Rs. 1,462.49 crore. They had bought a net Rs. 887.65 crore on Friday. Domestic institutional investors (DIIs) bought a net Rs. 2,609.57 crore.

Sensex Outlook

Technically, after an intraday dip, the market recovered sharply. The Sensex formed a bullish candle on the daily chart, and on the intraday charts, it formed a promising reversal formation, which is largely positive. For traders, 73,200 and 73,000 would now act as key support zones.

As long as the market is trading above the same, the pullback formation is likely to continue. On the higher side, 73,800 would act as an immediate resistance zone for the bulls. A successful breakout of 73,800 could push the market up to 74,500. However, below 73,000, the uptrend would become vulnerable. Below that level, traders may prefer to exit their long positions, said Shrikant Chouhan, Head of Equity Research, Kotak Neo. 

Nifty 50 Outlook

The Nifty 50 formed a bullish candle on Monday, although it remained within the previous session's trading range. This indicates consolidation with a positive bias.

"Going ahead, follow-through strength above the 20-day EMA placed at 22,820 will signal further pullback towards the key resistance area of 23,100-23,200 being the confluence of last week high and 50 days EMA. Failure to move above 22,820 will signal extension of the last two sessions' consolidation in the range of 22,370-22,820," said Pabitro Mukherjee, Deputy Vice President-Research, Bajaj Broking.

The 22,820 level is the immediate resistance. A sustained move above this level could support a recovery towards 23,100-23,200. On the downside, 22,370 remains an important support level; a break below this level could extend the consolidation phase.

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Bank Nifty Outlook

The Bank Nifty also recovered, ending its four-session decline and closing around the 54,300 mark. The index formed a bullish hammer-like candle, indicating buying interest at lower levels.

"While weakness below Monday's low of 53,777 will signal extension of decline towards key short-term support at 53,500-53,000, being the confluence of the trendline support joining previous major lows and key retracement of the previous major up move," said Pabitro Mukherjee, Deputy Vice President-Research, Bajaj Broking.

The 54,400 level is the immediate threshold, with 55,000 emerging as the next potential recovery target if buying momentum continues. On the downside, 53,777 is the immediate level to monitor, while the 53,500-53,000 zone remains a key short-term support area.