Benchmark indices opened the day lower as the Shanghai Composite dived 4 per cent for the second straight day as growth fears continued the haunt the markets there.
Indian markets were weak as worries over monsoon and a downgrade of GDP earnings by Moody's also affected sentiments.
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Shares in Vedanta dropped after worries that LIC may oppose a merger between Cairn India and Vedanta.
Metal stocks continued to remain weak following a rout in the Shanghai markets. Tata Steel and Hindalco were the major losers from the space.
Tata Motors which derives much of its JLR sales from China hit a new 52-week low as markets worried about growth in China.
PSU banking stocks which have had a phenomenal run in the last few trading sessions after the government announced a programme for complete revamp and recapitlaization of these banks gave up gains. Bank of
Baroda, Punjab National Bank and Union Bank of India were among the losers in trade.
Meanwhile, markets across Asia were trading sharply lower, following a drop in the Chinese markets. The Korean Kospi, The Singapore's Strait Times and the Japanese Nikkei were all lower.