The domestic benchmark indices slipped into negative territory in afternoon trade.

Investor sentiment was tepid after India on Tuesday said it attacked Pakistani army posts in Kashmir, while a slip in Asian shares after a Moody's downgrade on its sovereign credit rating on China also hurt risk appetite.

Speculators covering up their short positions ahead of the May derivatives contract expiry tomorrow had pushed shares higher in the morning.

The BSE 30-share barometer rebounded by 168.90 points to hit a high of 30,534.15 in intra-day deals. The Sensex sank to the day's low of 30,288.21 before recovering partially to 30,358.73, down 0.02 per cent over Tuesday's close.

At about 2 pm, the Nifty was down 0.07 per cent at 9,379.25.

The gauge had lost 205.72 points in the previous session after investors booked profits amid volatile global cues in the aftermath of a terror attack in the UK.

On the Nifty 50, 34 stocks declined to 16 that advanced.

The top five Nifty gainers: Tata Motors DVR (+4.91%), Tata Motors (+3.8%), GAIL (+2.17%), YES Bank (+1.84%) and Adani Ports (-1.57%).

Top five decliners on the Nifty: Infratel (-3.01%), Bank of Baroda (-2.7%), Cipla (-2.5%), Aurobindo Pharma (-2.3%) and Hindalco (-2.1%).

PSU banks, metal and pharma stocks were under pressure with the Nifty sector indices declining by up to 1 per cent.

Global markets

Chinese stocks fell and the Australian dollar skidded on Wednesday after Moody's downgraded its sovereign credit rating on China, adding to worries about the global impact of slowing growth and rising debt in Asia's economic powerhouse.

Shares elsewhere in Asia also slipped, with MSCI's broadest index of Asia-Pacific shares outside Japan down 0.3 percent, despite modest gains on Wall Street overnight.

Financial spreadbetter CMC Markets expected Britain's FTSE 100 to open slightly higher, Germany's DAX to start the day little changed, and France's CAC 40 to edge lower.

Japan's Nikkei stock index managed to end 0.7 per cent higher.