The key equity benchmarks declined further and hit fresh intraday low in mid-afternoon trade. The Nifty traded tad above the 17,600 mark. PSU Bank shares snapped three days gaining streak as profit booking emerged at high levels.

At 14:25 IST, the barometer index, the S&P BSE Sensex, was down 171.6 points or 0.29% to 59,555.41. The Nifty 50 index shed 50.60 points or 0.29% to 17,609.55.

In the broader market, the S&P BSE Mid-Cap index fell 0.12% while the S&P BSE Small-Cap index gained 0.15%.

The market breadth was positive. On the BSE, 1,762 shares rose and 1,693 shares fell. A total of 138 shares were unchanged.

Investors turned cautious as uncertainty over the path of U.S. monetary policy largely outweighed optimism over an economic recovery in China. Focus is now on the Fed's Beige Book report, due later on Wednesday, for the central bank's take on the state of the U.S. economy.

Market concerns about rising interest rates returned in recent sessions as hawkish comments from Fed officials and indications of some economic resilience in the US stoked apprehension about when the Fed Fed will pause its rate hike cycle.

Numbers to track:

The yield on India's 10-year benchmark federal paper advanced to 7.233 from 7.221 in previous trading session.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 82.1725, compared with its close of 82.0475 during the previous trading session.

MCX Gold futures for 5 June 2023 settlement slipped 0.92% to Rs 59,930.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.20% to 109.95.

The United States 10-year bond yield rose 1.44% to 3.623.

In the commodities market, Brent crude for June 2023 settlement lost $1.77 or 2.09% to $83 a barrel.

Buzzing Index:

The Nifty PSU Bank index declined 0.89% to 3,918.25. The index had advanced 5.42% in past three trading sessions.

Punjab & Sind Bank (down 3.36%), Canara Bank (down 1.74%), Union Bank of India (down 1.29%), Indian Bank (down 1.26%) and Punjab National Bank (down 1.22%) were the top index losers.

Further, Bank of India (down 0.99%), State Bank of India (down 0.75%), Bank of Baroda (down 0.7%), Indian Overseas Bank (down 0.62%) and UCO Bank (down 0.37%) declined.

On the other hand, Central Bank of India (up 1.12%), Bank of Maharashtra (up 0.71%) advanced.

Stocks in Spotlight:

IndusInd Bank declined 2.35%. The company announced that its GIFT City IBU branch has entered into a $100 million long-term loan agreement with the Japan Bank for International Cooperation (JBIC) to facilitate the growth of Japanese construction equipment companies in India.

Marksans Pharma rose 0.75% after the company announced that it has acquired manufacturing site situated in Goa from Tevapharm India.