Key benchmark indices pared early gains and were trading almost flat in morning trade. The Nifty traded just above the crucial 11900 mark. At 10:23 IST, the barometer index, the S&P BSE Sensex, was down 21.31 points or 0.05% at 39,795.17.45. The Nifty 50 index was down 7.55 points or 0.06% at 11,902.75.

The S&P BSE Mid-Cap index was flat at 14,946.02. The S&P BSE Small-Cap index was up 0.19%.

The market breadth, indicating the overall health of the market, was positive. On the BSE, 978 shares rose and 743 shares fell. A total of 103 shares were unchanged.

Investors are awaiting the Union Budget, which will be presented by Finance Minister Nirmala Sitharaman on Friday, 5 July 2019. After presenting the interim budget in February 2019, the Modi government will present its full-year budget 2019-20. The government is likely to amend several policies and schemes for delivering growth to the biggest drivers of the economy, including farmers, middle class, and the corporate sector.

Tata Communications was down 1.63% to Rs 467 after the company announced that Vinod Kumar has resigned as MD and group CEO with effect from 5 July 2019.

Reliance Home Finance was up 2.06% to Rs 12.9. CARE Ratings downgraded its ratings on company's non-convertible debenture of Rs 400 crore to 'D'. The reason for downgrade is due to rescheduling of non-convertible debentures.

Shoppers Stop was up 2.44% to Rs 504.25 after the company announced that Aditya Birla Sun Life Mutual Fund had acquired 19.81 lakh shares of the company. Post acquisition of shares, the holding of the fund amounts to 7.01% of the paid up capital of the company.

Larsen & Toubro (L&T) was up 0.99% to Rs 1578.9. MindTree was up 0.09% to Rs 914.15. L&T announced that on 2 July 2019, made payment of consideration to the shareholders of the MindTree (target company) who have tendered their shares in the open offer. The offer opened on 17 June 2019 and closed on 28 June 2019. Consequently, L&T's shareholding in MindTree stands at 60.06% of the total paid-up equity share capital.

Most private sector bank stocks were trading higher. IndusInd Bank (up 1.45%), Yes Bank (up 0.79%), Axis Bank (up 0.45%), AU Small Finance Bank (up 0.21%) and HDFC Bank (up 0.18%) edged higher. ICICI Bank (down 0.4%), RBL Bank (down 0.4%) and Kotak Mahindra Bank (down 0.13%) edged lower.

PSU Bank stocks witnessed selling. Syndicate Bank (down 1.52%), Bank of Baroda (down 0.54%), Bank of India (up 0.28%), State Bank of India (down 0.25%), Allahabad Bank (down 0.11%), Punjab National Bank (down 0.06%) and Union Bank of India (down 0.06%) declined. Oriental Bank of Commerce (up 0.7%) edged higher.

The S&P BSE Bankex was up 34.88 points or 0.1% at 35,117.10.

Overseas, Asian stocks were trading lower on Wednesday as global trade concerns weighed on investor sentiment.

US stocks managed modest gains on Tuesday as enthusiasm over the US-China trade truce faded after the United States threatened tariffs on additional European goods.

Meanwhile US President Donald Trump's administration on Monday threatened to impose tariffs on $4 billion of additional European Union goods in a long-running dispute over aircraft subsidies. The new wave of proposed duties comes amid a 15-year dispute at the World Trade Organization over aircraft subsidies given to U.S. aerospace manufacturer Boeing and its European rival, Airbus.