Indian shares were lower on Tuesday dragged by financial stocks, as sentiment across the globe turned sour amid worsened trade tensions between the U.S. and China.
Asian shares fell, and copper prices eased after Washington announced new tariffs on Chinese imports, inflaming trade tensions between the world's two biggest economies. MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.3 per cent.
Statements made by the U.S. and China are keeping the market subdued and the government's recent measures to stem the rupee fall did not please investors, said Gaurang Shah, senior vice president, Geojit Financial Services.
Markets have corrected and it's only healthy, he added.
The broader NSE Nifty was down 0.26 per cent at 11,347.85 as of 0543 GMT, dragged by top lenders ICICI Bank, State Bank of India and HDFC Bank. The benchmark BSE Sensex was 0.20 per cent lower at 37,509.41.
State-run Bank of Baroda Ltd fell as much as 14.2 per cent after the government's decision to merge it with Dena Bank and Vijaya Bank failed to enthuse investors.
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While Bank of Baroda saw its steepest fall in over three years, shares of Dena Bank and Vijaya Bank rose sharply as the smaller peers are expected to benefit from the merger.
The Nifty PSU bank index dropped as much as 2.8 per cent to its lowest since July 26.
Some metal stocks also fell, with Vedanta Ltd and Hindalco Industries Ltd among the top percentage losers.
Tata Motors Ltd dropped 1.8 per cent after unit Jaguar Land Rover said on Monday it will cut output at a UK car plant after warnings on the impact of Brexit and diesel policy.
Hindustan Unilever Ltd rose as much as 3.3 per cent after management commentary at a recent analyst meet for the company's growth boosted sentiment.