Indian shares closed slightly lower on Tuesday, with Yes Bank Ltd posting its biggest ever drop as rising bad loans dragged the private-sector lender to a shock quarterly loss. The broader NSE index ended 0.06 percent lower at 11,748.15, while the benchmark BSE index closed down 0.09 percent at 39,031.55.
Yes Bank, which slumped 29.2 percent to its lowest close since Dec. 10, was the biggest drag on both indexes.
IndusInd Bank Ltd closed 5.4 percent lower, while Indiabulls Housing Finance Ltd fell 5.8 percent.
Index heavyweights HDFC Bank Ltd and Infosys Ltd checked the fall on both indexes, rising 1.6 percent and 1.8 percent, respectively.
Yes Bank's shares fell as much as 30 percent in their worst day since September 21, 2018. The lender posted a loss of 15.07 billion rupees ($216 million) for the quarter ended March 31, while analysts were expecting a profit of 10.70 billion rupees. Provisions and contingencies surged to 36.62 billion rupees from 4 billion rupees a year ago.
Financial companies accounted for most of the weakness on the NSE index. State-run lenders were battered, with Nifty PSU Bank index falling as much as 4.3 percent, its biggest intraday fall since Oct 11.
Housing finance firms also lost ground, with Indiabulls Housing Finance Ltd down as much as 7.9 percent and PNB Housing Finance up to 9.6 percent lower.
Reliance Home Finance Ltd fell up to 20 percent after rating agency ICRA and CARE Ratings cut rating on some of the company's debt programmes.
"There is some weakness in the Indian market, in line with Asian shares, which fell after China's manufacturing data disappointed," said Sunil Sharma, chief investment officer, Sanctum Wealth Management.
"Domestically, investors are digesting additional provisioning worries and loan book quality. Finally, there is probably some caution ahead of the Fed meeting this week."
Among other losers, shares of motorcycle maker Hero MotoCorp Ltd dropped as much as 3.6 percent to their lowest level since March 2016, after it reported weak quarterly results on Friday. Bucking the broader trend, IT stocks advanced. IT bellwether Infosys Ltd gained 1.9 percent, while HCL Technologies added 3.4 percent.