Key equity indices were trading near day's low in mid-afternoon trade. The Nifty struggled to hold the crucial level of 11500 and declined. At 14:25 IST, the barometer index, the S&P BSE Sensex, was down 238.79 points or 0.62% at 38,492.17. The Nifty 50 index was down 69.15 points or 0.61% at 11,486.15.

The NSE Nifty 50 was trading below its 100-day moving average (DMA) of 11,506.78. The index breached its 50-day moving average of 11,715.27 on Monday, 8 July 2019. The other key level to watch for the Nifty is 11,110.48, which is 200-DMA.

In broader markets, the S&P BSE Mid-Cap index was down 0.57%. The S&P BSE Small-Cap index was down 0.59%.

The market breadth, indicating the overall health of the market, was weak. On the BSE, 883 shares rose and 1431 shares fell. A total of 138 shares were unchanged.

Pharma stocks were mixed. Sun Pharmaceuticals Industries (up 1.99%), Divi's Laboratories (up 1.52%), Lupin (up 0.55%), GlaxoSmithKline Pharmaceuticals (up 0.35%), Cadila Healthcare (up 0.28%) and Alkem Laboratories (up 0.24%) gained. Wockhardt (down 1.67%), Piramal Enterprises (down 1.28%), Glenmark Pharmaceuticals (down 0.7%), Cipla (down 0.49%), Aurobindo Pharma (down 0.4%), Dr Reddy's Laboratories (down 0.19%) and IPCA Laboratories (down 0.17%) declined.

FMCG stocks witnessed selling. Tata Global Beverages (down 2.66%), GlaxoSmithkline Consumer Healthcare (down 1.68%), Godrej Consumer Products (down 1.34%), Colgate Palmolive (India) (down 1.28%), Procter & Gamble Hygiene & Health Care (down 1.2%), Bajaj Consumer Care (down 1.07%), Nestle India (down 0.73%), Hindustan Unilever (down 0.37%), Jyothy Laboratories (down 0.24%) and Britannia Industires (down 0.04%) declined. Marico (up 0.69%), Dabur India (up 0.64%) and ITC (up 0.16%) edged higher.

Strides Pharma Science was down 1.07% to Rs 375.65. The company announced its departure from an investment made in Arrow for AUD 394 million.

PC Jeweller was down 1.66% to Rs 38.45 after reports emerged that Sachin Gupta, the company's promoter, has sold 28,03,627 shares through market sale from 2 July to 4 Jul 2019.

Autoline Industries was up 4.06% to Rs 52.5. The company announced that the Government of Maharashtra has approved additional Industrial Promotion Subsidy (IPS) claim of Rs 44.61 crore.

IT major TCS dropped 1% to Rs 2110.15. On a consolidated basis, TCS reported 0.06% rise in net profit to Rs 8131 crore on 0.43% rise in total income to Rs 38172 crore in Q1 June 2019 over Q4 March 2019. TCS announced Q1 result after market hours yesterday, 9 July 2019.

In a separate announcement, the company reported that it has been given an overall positive rating in the recent vendor rating report by Gartner lnc, based on a holistic evaluation covering the company's strategy, product/service, pricing structure, technology/ methodology, support/ account management and corporate viability.

Shares of most public sector oil marketing companies (PSU OMCs) declined as Brent crude oil price rose. Indian Oil Corporation (down 3.13%), Bharat Petroleum Corporation (down 1.64%) and Hindustan Petroleum Corporation (down 0.82%) declined.

In the commodities market, Brent crude for September 2019 settlement gained $1.09 and traded at $65.25 a barrel. The contract rose 5 cents or 0.07% to settle at $64.16 a barrel in the previous trading session.

MCX Gold futures for 5 August 2019 settlement fell 0.38% at Rs 34,450.

The yield on 10-year benchmark federal paper fell to 6.555% at 14:06 IST compared with 6.588% at close in the previous trading session.

On macro front, India's new budget outlined some economic reforms that could support the economy, but its fiscal stance was left broadly unchanged, with no plans for meaningful consolidation, says Fitch Ratings. The budget targets a slight narrowing in the fiscal deficit target, to 3.3% of GDP, from an estimated 3.4% in FY19 and in the FY20 interim budget.

Fitch said the fiscal targets are broadly credible, although projected revenue growth, at 13.5%, may prove optimistic as it is based on the government's higher 7% real GDP growth forecast and disinvestment targets might not be met.

The rating agency believes off-budget spending is likely to increase due to, for instance, the additional banking-sector recapitalisation, which is equivalent to 0.3% of GDP. This should not affect the deficit, but it will raise the debt level, Fitch added.

Overseas, European markets were trading marginally lower while most Asian markets closed on higher. Investors around the globe await comments from U.S. Federal Reserve Chairman Jerome Powell for possible clues on the central bank's next move on interest rates.

US stocks ended mixed on Tuesday after a late-day rally boosted the S&P 500 and Nasdaq Composite but left the Dow Jones Industrial Average to suffer its third straight loss.

Investors await the two-day testimony before Congress by Fed Chairman Jerome Powell due to start Wednesday. Also due on Wednesday is the central bank's June policy meeting minutes. Markets are hoping the central bank's chief will shed some light on a meeting of the central bank's interest-rate setting committee, slated for July 30-31, with investors clinging to hopes for a rate cut.

On the economic data front, the National Federation of Independent Business released its small business optimism index, which fell to 103.3 in June, from 105 in May.