Benchmark share indices continued to trade marginally lower in late morning deals weighed down by selling pressure in metal, capital goods and bank shares.
By 1130, the Sensex was down 38 points at 17,403 and the Nifty declined20 points to 5,254.
On the global front, Asian shares slid to near six-week lows and the euro fell on Wednesday, as investors turned edgy ahead of a pivotal European Central Bank meeting on Thursday and U.S. payroll data on Friday. Nikkei, Strait Times, Hang Seng, Taiwan and Kospi have plunged between 1-2%.
Back home, Indian private sector services business expanded at the fastest pace in six months in August, driven by the strongest growth in new business since February and increasing optimism about the future, a survey showed on Wednesday.
The HSBC Purchasing Managers' Index for services business, based on a survey of about 400 private-sector companies, rose to 55.0 in August from 54.2 in July, marking nearly a year of uninterrupted monthly growth.
Meanwhile, the rupee continued to slide today and was down 25 paise at 55.91 against the dollar on persistent demand for the American currency from banks and importers.
On the sectoral front, BSE Metal, Capital Goods, Power, Auto, Banks, Healthcare and PSU indices have plummeted between 0.5-1.3%. However, BSE FMCG index has gained by over 0.5%.
Metal shares witnessed selling pressure tracking drop in commodity prices on concerns that demand would falter in wake of global economic slowdown. Jindal Steel, Sterlite and Tata Steel have melted between 2-3%.
Capital Goods majors like BHEL and L&T have declined between 1-3% on concerns that growth slowdown could dampen new orders.
Auto shares like Tata Motors, M&M, Bajaj Auto and Maruti Suzuki have declined between 0.5-2%.
Other notable losers include ICICI Bank, Sun Pharma, NTPC, SBI and Tata Power.
Shares in oil marketing companies rose on media reports of a potential hike in diesel and other fuel prices after the monsoon session of Indian parliament ends on Friday, dealers say.
Hindustan Petroleum Corp rose 0.9%, Bharat Petroleum Corp rose 1.3%, while Indian Oil Corp rose 1%.
Among individual shares, Balalji Telefilms soared 8% to Rs 43.70 on reports that STAR India may sell its 25.99% holding in the company to its promoters.
The BSE mid-cap and small-cap indices are trading marginally higher, both gaining between 0.1-03%.
The overall market breadth remains positive with 1,246 stocks advancing while 1,043 declining.
