Consequently, the key indices closed the day's trade on a flat note, as heavy selling pressure was witnessed in automobile, consumer durables and capital goods stocks.
The wider 51-scrip Nifty of the National Stock Exchange (NSE) inched down by 1.55 points or 0.02 per cent to 8,519.50 points.
On the other hand, the barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 27,912.14 points, closed the day's trade at 27,815.18 points -- up a mere 7.04 points or 0.03 per cent from the previous close at 27,808.14 points.
The Sensex touched a high of 27,928.76 points and a low of 27,752.14 points during the intra-day trade.
The BSE market breadth was tilted in favour of the bears -- with 1,746 declines and 1,007 advances.
Both indices had ended in the positive territory during the previous trade session on Tuesday to reach their new 11-month closing high levels.
The barometer index edged up by 181.45 points or 0.66 per cent to 27,808.14 points, while the Nifty gained by 53.15 points or 0.63 per cent to 8,521.05 points.
Initially on Wednesday, the benchmark indices opened on a higher note, in sync with their Asian peers.
However, equity markets soon ceded their initial gains, as profit booking after a robust rise of more than two per cent over the last two sessions, hampered the upward trajectory.
Besides, lower crude oil prices, anxiety over the upcoming quarterly results and disappointing inflation figures for June eroded investors' confidence.
The macro-economic inflation data which was released after the market hours on Tuesday showed a rise in June's inflation levels. This dampened hopes of a rate cut by the Reserve Bank of India (RBI).
The data further disclosed that consumer price index (CPI) in June rose to 5.77 per cent from 5.76 per cent in May due to a rise in food prices.
The other key macro-economic data -- Index of Industrial Production (IIP) -- revealed a marginal increase of just 1.2 per cent year-on-year (YoY) in May 2016.
Nevertheless, healthy progress of monsoon season, expectations of GST (Goods and Services Tax) getting passed, recapitalisation of state-run banks and a strong rupee supported prices at the lower levels.
The Indian rupee strengthened by 14 paise to 67.05 against a US dollar from its previous close of 67.19 to a greenback.
"Profit booking ahead of key event risks and disappointing inflation figures dragged the Indian equity markets lower," Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS.
"However, good progress of monsoon season, expectations of healthy quarterly results, more economic reforms supported prices at the lower levels."
Dhruv Desai, Director and Chief Operating Officer of Tradebulls pointed out that Nifty opened with marginal gains on the back of positive global cues.
"Over all it traded with sideways sentiments throughout the session. Most sector stocks like banking, pharma and auto faced profit booking at higher levels," Desai noted.
"Less volatility in USD/INR futures prices kept the Nifty price movement sideways to certain extent. Sugar sector stocks also faced profit booking in consecutive sessions."
In terms of investments, the provisional data with exchanges showed that the foreign institutional investors (FIIs) bought stocks worth Rs 290.53 crore, while the domestic institutional investors (DIIs) divested scrip worth Rs 654.73 crore.
Sector-wise, the S&P BSE automobile index declined by 135.96 points, followed by the consumer durables index, which fell by 98.64 points, and the capital goods index slipped by 94 points.
On the other hand, the S&P BSE metal index surged by 166.59 points, followed by the IT (information technology) index, which edged up by 106.60 points, and the TECK (media, entertainment and technology) index rose by 44.99 points.
Major Sensex gainers during Wednesday's trade were: Tata Steel, up 4.47 per cent at Rs 357.70; Gail, up 3.09 per cent at Rs 390.15; ONGC, up 3.01 per cent at Rs 234.60; Coal India, up 2.00 per cent at Rs 323.20; and Infosys, up 1.46 per cent at Rs 1,193.15.
Major Sensex losers were: PowerGrid, down 2.85 per cent at Rs 161.80; Lupin, down 1.38 per cent at Rs 1,649; Larsen and Toubro (L&T), down 1.20 per cent at Rs 1,549.15; Maruti Suzuki, down 1.14 per cent at Rs 4,320.10; and Asian Paints, down 0.90 per cent at Rs 1,009.50.
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