Mounting concerns over falling economic growth besides continuing turmoil in the banking and financial sectors too weighed on the sentiment. Amid worsening of US-China trade tensions, the Chinese yuan and almost all other Asian currencies traded weaker against the dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was 0.1 per cent higher. Japan's benchmark Nikkei added 0.3 per cent while Shanghai Composite Hong Kong's Hang Seng gained 0.5 per cent each.

The other prominent losers were Bajaj Finserv, Vedanta, Adani Ports and JSW Steel which lost over 2 per cent each. Hindalco, Zee Entertainment, IndusInd Bank and Bajaj Finance too were in the red.

At the National Stock Exchange, most sectoral indices were in the negative territory with Nifty PSU banks down by 1.2 per cent and private banks by 0.5 per cent. However, Nifty IT was up by 1.4 per cent.

Japan's Nikkei was firmer by 0.09 per cent Shanghai blue chips rose 0.7 per cent. The US-China trade dispute remained a drag after Beijing vowed a day earlier to counter the latest tariffs on 300 billion dollars of Chinese goods. 

Asian indices opened in the green following a rally overnight in US markets where US President Donald Trump delayed the September 1 deadline for 10 per cent tariffs on some Chinese imports. 

But pharma stocks were on slippery ground with Dr Reddy down by 5.8 per cent, Sun Pharma by 5.7 per cent and Cipla by 1.3 per cent. Wipro, Coal India, Power Grid and ONGC also shed gains by over 1 per cent. 

Among stocks, Yes Bank topped the chart of losers. It closed 10.9 per cent lower at Rs 73.20 per share. Bajaj Finance was down by 6 per cent, Mahindra & Mahindra by 5.8 per cent, Bajaj Finserv by 5.5 per cent and Eicher Motors by 5.3 per cent.

Indiabulls Housing Finance gained by over 11 per cent to trade at Rs 561.70 per share. Bharat Petroleum Corporation was up by 2.3 per cent, Sun Pharma and Tata Motors by 2 per cent each.

MSCI's broadest index of Asia-Pacific shares outside Japan bounced 0.6 per cent even though it was still down more than 7 per cent over the past two weeks. Japan's Nikkei edged up 0.6 per cent while Chinese blue chips rose 0.9 per cent.