Key indices remained in a small range in negative zone in early afternoon trade. At 12:25 IST, the barometer index, the S&P BSE Sensex, was down 75.40 points or 0.19% at 38,863.82. The Nifty 50 index was down 15.10 points or 0.13% at 11,656.85. Pharma shares gained.

Local stocks drifted lower in early trade on negative Asian stocks. Stocks hovered in negative zone in morning trade. Key indices continued to trade with weakness in mid-morning trade.

The S&P BSE Mid-Cap index was up 0.24%. The S&P BSE Small-Cap index was up 0.39%. Both these indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, was positive. On the BSE, 1181 shares rose and 1030 shares fell. A total of 159 shares were unchanged.

Tata Consultancy Services (TCS) fell 1.3%. TCS during market hours today announced the world's first successful cross-border securities settlement between two central securities depositories (CSDs) - Maroclear, the CSD of Morocco, and Kuwait Clearing Company, the CSD of Kuwait - using cash coins on the BaNCS Network, powered by Quartz Blockchain.

Pharma shares gained. Cadila Healthcare (up 1.32%), Cipla (up 3.26%), Dr Reddy's Laboratories (up 1.58%), Glenmark Pharmaceuticals (up 1.88%), Lupin (up 0.56%), Sun Pharmaceutical Industries (up 1.11%), Alkem Laboratories (up 0.91%), GlaxoSmithKline Pharmaceuticals (up 0.15%), Aurobindo Pharma (up 1.35%) and Wockhardt (up 0.97%) edged higher.

Overseas, Asian shares are trading lower as the IMF lowered its global growth outlook and as tensions over tariffs between the United States and Europe escalated.

U.S. stocks closed lower Tuesday, with the S&P 500 snapping its eight-day winning streak, on fears over escalation of trade tensions with the European Union and a weaker global outlook from the International Monetary Fund.

The office of the U.S. Trade Representative threatened to levy tariffs on many European goods late Monday. The threat is a retaliation against European companies' subsidies for aircraft manufacturer Airbus. If the U.S. follows through, the proposed tariffs would affect about $11 billion in imports to the U.S., including helicopters, bicycles, cheese and wine. Lighthizer said the Trump administration would wait for World Trade Organization clearance to implement the duties.

The IMF lowered the outlook for global economic growth in 2019 to 3.3% from 3.5% projected in January, marking its third reduction of growth expectations in six months. The decline has been broadly felt, with all advanced economies, including the U.S., and most major emerging-market economies seeing deterioration in their outlook.