Heavy selling pressure was witnessed in capital goods, banking and metal stocks.
The wider 51-scrip Nifty of the National Stock Exchange (NSE) inched down 7.55 points, or 0.09 per cent to 8,625.05 points.
The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 28,065.25 points, traded at 27,980.87 points (at 2.00 p.m.) -- down 9.34 points, or 0.03 per cent from the previous close at 27,990.21 points.
The Sensex has so far touched a high of 28,108.39 points and a low of 27,959.87 points during the intra-day trade.
The BSE market breadth was marginally tilted in favour of the bulls -- with 1,432 advances and 1,150 declines.
On Monday, both the key Indian indices had closed flat -- marginally in the green, prompted by mixed global cues and lower crude oil prices.
The barometer index had risen by 4.67 points, or 0.02 per cent, while the NSE Nifty inched up 3.45 points, or 0.04 per cent.
Initially on Wednesday, the benchmark indices opened on a flat note on the back of negative Asian and European markets, and slightly positive US markets.
Investors were also watchful of the negotiations for amendments in a tax treaty between India and Singapore.
In addition, caution prevailed in the markets ahead of futures and options (F&O) expiry on Thursday and hampered the upward trajectory.
Moreover, apprehension of a possible interest rate hike in the US following Fed Reserve Chair Janet Yellen's speech later during the week, and lower crude oil prices led the key indices to cap gains.
"Largely the markets are flat ahead of the F&O expiry tomorrow (Thursday). The investors are also keeping an eye out on the amendments in the India-Singapore tax agreement," Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS.
"Oil prices are steeply down, one of the main reasons being caution ahead of US crude oil inventory data due tomorrow. The foreign institutional investors (FII) continue to be net sellers during the week."
