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Benchmark share indices recovered from their day's lows after the Economic Survey 2014 focussed on fiscal consolidation.
At 1:10PM, the 30-share Sensex was down 26 points at 25,556 after hitting a low of 25,369 and the 50-share Nifty was down 5 points at 7,618 after touching a low of 7,552.
The government in the economic survey estimated the FY15 GDP growth at 5.4-5.9%, adding that it is likely to be on the lower side of the projection. FY15 current account deficit may be limited to about $45 bn or 2.1% of GDP, according to the survey.
Saying that inflation limits the scope for RBI to cut rates, the survey added that a formal monetary policy framework was needed for targeting CPI inflation. WPI inflation is likely to moderate by 2014-end, it added.
The survey also called for a new Fiscal Responsibility and Budget Management (FRBM) Act with teeth.
The rupee was trading at 59.70 compared with its Tuesday's close of 59.78, as market participants remained cautious ahead of the budget tomorrow.
Asian markets were trading lower as investors adopted a wait-and-watch policy ahead of earnings. Japanese shares ended marginally lower on the back of stronger yen and China inflation data. The benchmark Nikkei ended down 0.1% at 15,302.65.
The BSE FMCG, Oil and Gas indices were the top sectoral gainers while Auto, IT and Healthcare indices were among the top losers.
TCS was down 2% at Rs 2,400 while Infosys was trading 0.4% lower at Rs 3,320.
Auto shares witnessed profit taking after recent gains. Tata Motors, M&M, Bajaj Auto and Hero MotoCorp were down 1-2.3% each.
FMCG shares gained with the survey saying that social sector schemes such asMNREGA, NRHM, SSA, need a complete revamp. ITC was up nearly 2% and Hindustan Unilever was up 0.7%.
Oil shares were also among the top contributors to the Sensex gains. ONGC was up 2.1% and Reliance Industries was up 0.5%.
Among other shares, Huhtamaki PPL (formerly The Paper Products) has surged 9% to Rs 149 on NSE after the company announced acquisition of Positive Packaging Industries for a total enterprise value of Rs 818 crore through internal accruals.
In the broader market, the BSE Mid-cap was down 0.6% and Small-cap index was down 1.1%.
Market breadth was weak with 1,896 losers and 825 gainers on the BSE.
