The focus will be on the budget with foreign investors closely monitoring whether the government will put fiscal discipline ahead of election largesse.
Concerns also remain on the macroeconomic front. The government is unlikely to achieve its $350 billion export target in the current fiscal year that ends in March, Commerce and Industry Minister Anand Sharma said on Wednesday.
"Containing fiscal deficit and managing it would be the major thrust and challenge," said K K Mital, head of portfolio management at Globe Capital.
"Fiscal discipline is the most important area to woo foreign investors."
The BSE Sensex rose 0.04 percent, or 7.03 points, to end at 19,642.75.
The 50-share Nifty rose 0.06 percent, or 3.35 points, to 5,943.05.
Shares in Reliance Industries ended 3.11 percent higher, the biggest single-day gain since January 17, after the company said it, along with UK partner BP , would invest over $5 billion in the next three to five years to boost declining output at a key natural gas field off India's east coast.
DLF shares gained 3.6 percent to close at Rs 279.85, their highest level since January 11, 2011, on continued expectations of an earnings recovery and on a CLSA upgrade. The property developer had gained 8.6 percent in the previous two sessions.
Ambuja Cements Ltd rose 3.26 percent and ACC Ltd gained 0.9 percent, for a second day after shareholders at each of the cement makers separately approved paying technology fees to controlling stakeholder Holcim Ltd of 1 percent of net annual sales.
Oil marketing companies ended higher, with traders saying oil and gas stocks were likely to benefit from government reforms in the sector.
Indian Oil Corp rose 1.1 percent, Bharat Petroleum Corp gained 2.9 percent and Hindustan Petroleum Corp rose 2.07 percent.
Shares in Steel Authority of India ended 0.45 percent higher after gaining 5 percent in intra-day trading, following a report by CNBC-TV18 news channel that the company board would consider a buy-back of equity shares on February 25.
A SAIL spokeswoman declined to comment immediately.
However shares that fell Jaiprakash Power Ventures ended 6.7 percent lower after the company announced the opening of qualified institutional placement to raise up to 35 billion rupees at 31.93 per share.
Unitech fell 2.75 percent on concerns over the 2G case. Last week the Central Bureau of Investigation said it is looking into whether a prosecutor for the agency discussed a probe into alleged corruption in the allocation of mobile phone airwaves five years ago with one of the people being investigated.
Welspun Corp fell 4.64 percent after the National Stock Exchange excluded the company's shares from trading in the futures and options segment from April 26, without giving a reason.