The Sensex and the Nifty fell nearly one per cent, marking their lowest close in nearly two weeks, led by declines in lenders after State Bank of India's quarterly results disappointed investors.

Domestic sentiment was hit as investors turned jittery over the logjam in Parliament about the key Goods and Services Tax (GST) Bill and global volatility after China unexpectedly devalued its currency.

The Rajya Sabha once again today failed to take up the GST Bill as the Congress and the Left parties blocked the proceedings demanding External Affairs Minister Sushma Swaraj's resignation over Lalit Gate.

China devalued the yuan on Tuesday after a run of poor economic data, guiding the currency to its lowest point in almost three years in a move it billed as free-market reform.

The central bank described it as a "one-off depreciation" of nearly 2 per cent, based on a new way of managing the exchange rate that better reflected market forces, but economists said the timing suggested it was also aimed at helping exporters.

The 30-share BSE index Sensex plunged 235.63 points or 0.84 per cent to 27,866.09 and the 50-share NSE index Nifty fell 63.25 points or 0.74 per cent to 8,462.35.

After opening at 28,193.26, the Sensex touched the day's high of 28,205.12 and a low of 27,825.83.

Among BSE sectoral indices, metal index fell the most by 3.52 per cent, followed by PSU 2.12 per cent, realty 1.69 per cent and banking 1.53 per cent. On the other hand, IT index was up 1.38 per cent and TECk 0.91 per cent.

Top five Sensex gainers were Infosys (+2.07%), TCS (+1.25%), Cipla (+0.62%), Wipro (+0.46%) and Maruti (+0.1%), while the major losers were Tata Steel (-5.46%), SBIN (-4.87%), Hindalco (-4.22%), Tata Motors (-4.16%), and Coal India (-3.85%).

State Bank of India's shares slumped and stoked selling in other state-run banks as well after its April-June net interest income and fresh slippages disappointed investors.

Losses were seen across sectors with the exception of IT stocks, which held out on account of a weak Indian rupee.

Parliament logjam

With only two days for the Parliament's monsoon session to end, investors worry that a key reform on goods and services tax might get delayed amid continued protests by the Opposition.

"The disruption in parliament and the Chinese currency devaluation has created nervousness," G Chokkalingam, founder of Equinomics, a Mumbai-based research and fund advisory firm, said.

Chokkalingam said he did not expect the GST Bill to be passed in the current session of Parliament.

In the foreign exchange market, the rupee fell below 64 against the dollar, tracking a stronger US dollar after China devalued the yuan by nearly 2 per cent.

Global markets

European shares retreated on Tuesday, with carmakers and luxury goods stocks among the worst-performers after China devalued its yuan currency.

The pan-European FTSEurofirst 300 index fell 0.2 per cent, while the euro zone’s blue-chip Euro STOXX 50 index declined by 0.3 per cent.

The US dollar lurched higher on Tuesday as China allowed its yuan to fall to levels last seen in 2012, a shift that could provide a competitive boost to exports for the world’s second-largest economy.

Asian stocks turned mixed as investors weighed the implications of the surprise move, which seemed to end months of officially sanctioned yuan strength.

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