Stocks hovered in negative zone in mid-morning trade. At 11:25 IST, the barometer index, the S&P BSE Sensex, was down 142.44 points or 0.35% at 40,125.18. The Nifty 50 index was down 52.45 points or 0.43% at 12,036.10. IT stocks fell.

Key indices cut losses soon after opening with downward gap. A bout of volatility was witnessed in morning trade as the key indices once again sank in negative zone after briefly turning positive.

The S&P BSE Mid-Cap index was up 0.16%. The S&P BSE Small-Cap index was up 0.1%. Both these indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, was positive. On the BSE, 1033 shares rose and 1122 shares fell. A total of 125 shares were unchanged.

IT stocks fell. TCS (down 2.1%), Infosys (down 1.05%), HCL Technologies (down 1.88%), Oracle Financial Services Software (down 0.48%), Tech Mahindra (down 0.37%), MindTree (down 1.19%), Hexaware Technologies (down 2.49%) and Mphasis (down 0.89%) declined.

Wipro rose 1.24% to Rs 294.90 after the company fixed 21 June 2019, as the record date for the proposed buyback of shares. Wipro plans to buyback up to 32.30 crore fully paid-up equity shares of Rs 2 each, representing up to 5.35% of the total paid-up equity share capital of the company, at a price of Rs 325 per share, for an aggregate amount of up to Rs 10500 crore. The announcement was made after market hours yesterday, 3 June 2019.

Mahanagar Telephone Nigam rose 4.6% on reports that the government will take steps to revive state-run telecom companies. Ravi Shankar Prasad, who recently took charge as the telecom minister, reportedly said that the government will take steps to revive state-run Bharat Sanchar Nigam (BSNL) and Mahanagar Telephone Nigam (MTNL). Responding to questions on the merger of the two telecom PSUs, the minister reportedly said that the clarity on that would evolve going ahead. Merger is a complex business issue and the government will weigh all options before coming to any conclusion, he reportedly added.

Overseas, most Asian stocks were trading lower as an intensifying U.S.- China trade war inflamed concerns about global growth. US stocks finished mostly lower Monday, as the government stepped up scrutiny of technology giants for possible violations of antitrust law.

Comments from the US Federal Reserve on Monday, meanwhile, raised expectations the U.S. central bank is moving closer to a rate cut, as did a closely watched U.S. factory survey.

In US economic data, the Institute for Supply Management said its US Manufacturing Purchasing Managers Index declined to 52.1 in May from 52.8 in April, marking the lowest level since October 2016.