Key factors that dragged the markets lower

2. US-China tensions: Tensions between Beijing and Washington remain in view after the US State Department submitted a proposal for the Trump administration to add China's Ant Group to a trade blacklist, according to a Reuters report, before the financial technology arm of e-commerce giant Alibaba is slated to go public.

3. Covid makes a comeback: Concerns that a resurgence in the Covid-19 pandemic could lead governments to again shut down economies spurred profit-taking, particularly after the recent stock rally. With cases surging, some European nations are closing schools, cancelling surgery and enlisting student medics as overwhelmed authorities braced for a repeat of the nightmare scenario seen earlier this year.

4. IT pack saw massive profit booking as HCL Tech was the top loser, down 3.84 per cent. Tech Mahindra, HCL Tech, ICICI Bank, Bajaj Finance, TCS and ITC were among other major names that opened with cuts.

MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.5 per cent while Japan's Nikkei dropped 0.5 per cent.

U.S. S&P 500 futures sagged 0.27 per cent in Asia after major U.S. stock indexes ended the previous session lower, with the S&P 500 closing down 0.7 per cent and the Nasdaq Composite Index shedding 0.8 per cent.

Q2 earnings: Mindtree, Jupiter Infomedia, Hathway Cable, Cyient, Dolat Capital, South Indian Bank and Trident were among those that will come out with their numbers.