Benchmark share indices continued to trade flat after the first hour of trade as investors shifted focus to fundamentally sound stocks in the broader market.

At 10:35AM, the 30-share Sensex was down 23 points at 28,421 and the 50-share Nifty was down 2 points at 8,522.

In the broader market, the BSE Mid-cap and Small-cap indices were up 1.2% each.

HSBC India Services PMI for November 2014 is due on Wednesday. Adjusted for seasonal factors, the headline HSBC India Services PMI Business Activity Index fell to 50 in October, from 51.6 in September.

Meanwhile, foreign institutional investors were net buyers in Indian equities worth Rs 107 crore on Tuesday, as per provisional stock exchange data.

Asian markets have gained on a rebound in crude oil prices. Japan's Nikkei share average rose to a more than seven-year high on Wednesday as the dollar hit a fresh seven-year high against the yen. Nikkei trimmed early gains and was up 0.5% while Shanghai Composite was also up nearly 0.5%. Singapore's Straits Times was up 0.3% and Hang Seng slipped 0.4%.

BSE Auto index was the top sectoral gainer on the BSE up nearly 1.1% followed by Capital Goods and Power indices among others. FMCG index was the top loser down 0.7% followed by Healthcare and IT indices.

BHEL extended gains and was the top Sensex gainer up 3.7% after a foreign brokerage upgraded the stock. L&T was up 0.3%.

Tata Motors was up 1.2% on news that its prized acquisition Jaguar Land Rover has started to build a plant in Brazil. Other auto stocks that firmed up include Maruti Suzuki, M&M and Bajaj Auto.

Hero MotoCorp was up 0.3%. The company in a release late Tuesday said that it has appointed world golf champion Tiger Woods as its first global corporate partner.

Other Sensex gainers include, SBI, Axis Bank and Hindustan Unilever.

IT majors extended losses with Infosys and TCS down 0.3-1.3% each.

HDFC and HDFC Bank were down 0.5-1.3% each contributing the most to the Sensex losses.

In the pharma space, Dr Reddy's Labs and Sun Pharma were down 0.3-1.7% each.

Among other shares, Shares in defence companies are trading higher by up to 6%, extending their previous day’s rally on BSE, in otherwise subdued market.

Bharat Electronics (up 6% to Rs 2,672), Astra Microwave Products (up 4% at Rs 127), Centrum Electronics (4% at Rs 640), BEML (up 3% at Rs 765) and Pipavav Defence (3% at Rs 36.45) are up 3-6% on BSE. Most of these stocks rallied between 5-10% on Tuesday.

According to Business Standard reports, a total of 41 proposals for an indicative cost of Rs 119,719 crore have been cleared by the Defence Acquisition Council (DAC) since June 2014.

Market breadth was positive with 1,139 advances and 400 declines on the BSE.