The Sensex was almost flat while the Nifty was trading with small losses in early afternoon trade. At 12:25 IST, the barometer index, the S&P BSE Sensex, was down 4.12 points or 0.01% at 34,647.12. The Nifty 50 index was down 20.65 points or 0.20% at 10,516.05. Negative cues from other Asian shares dampened investors sentiment. Selling in index pivotals put pressure on bourses.

After opening on a positive note, the market declined as the session proceeded. Indices hovered in a range with small losses in mid-morning trade. Indices pared losses in early afternoon trade.

The broader market was trading higher. Among secondary barometers, the BSE Mid-Cap index was up 0.28%. The BSE Small-Cap index was up 0.51%. Both these indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, was positive. On BSE, 1319 shares rose and 1030 shares fell. A total of 139 shares were unchanged.

Index heavyweight and housing finance major HDFC was down 0.64% to Rs 1798.35.

Index heavyweight Reliance Industries (RIL) was down 0.68% to Rs 920.60.

Index heavyweight and cigarette major ITC was down 1.15% to Rs 275.60.

Cement shares declined. UltraTech Cement (down 1.47%) and ACC (down 0.62%), edged lower. Ambuja Cements was up 0.07%.

Grasim Industries was down 0.41%. Grasim has exposure to cement sector through its holding in UltraTech Cement.

Realty shares were mixed. Phoenix Mills (down 1.47%), Godrej Properties (down 1.46%), DLF (down 1.21%), Oberoi Realty (down 1.17%), Housing Development and Infrastructure (HDIL) (down 0.55%), Prestige Estates Projects (down 0.48%), Mahindra Lifespace Developers (down 0.41%) and Unitech (down 0.22%), edged lower. Sunteck Realty (up 0.15%), Parsvnath Developers (up 0.35%), Omaxe (up 0.59%), Indiabulls Real Estate (up 0.68%), Peninsula Land (up 0.98%), D B Realty (up 2.16%), Anant Raj (up 2.33%) and Sobha (up 4.28%), edged higher.

On the political front, Janata Dal (Secular), or JD(S), leader H D Kumaraswamy will take oath as Chief Minister of Karnataka today, 23 May 2018, at 16:30 IST on the steps of the Vidhana Soudha, the state secretariat. Governor Vajubhai Vala will administer the oath of office and secrecy to Kumaraswamy.

The 12 May 2018 Karnataka assembly polls threw up a hung verdict with BJP emerging as the single largest party with 104 seats. The Congress was next with 78 and the JD(S) followed with 37. The BSP has one MLA and two seats went to Independents.

Overseas, Asian shares were trading lower after President Donald Trump said he was not satisfied with bilateral trade talks with China that occurred last week, but called them a start to working out the US trade imbalance with Beijing.

Meanwhile, China announced on Tuesday that it would reduce tariffs on some vehicles to 15% from as much as 25%. Tariffs on certain automotive parts would also be cut.

US stocks closed lower overnight as uncertainty over trade policy and other geopolitical issues remained high.

On the geopolitical front, Trump said Tuesday there was a substantial chance that a summit with North Korean leader Kim Jong Un may not work out. Trump's comments came as he met South Korean President Moon Jae-in ahead of a planned meeting, scheduled for 12 June 2018, with Kim.