Indian shares fell on Monday in line with Asian markets, as investors dumped riskier assets following North Korea's latest nuclear test.
Risk appetite turned fragile after North Korea on Sunday conducted its sixth and most powerful nuclear test, which it said was of an advanced hydrogen bomb for a long-range missile, marking a dramatic escalation of the regime's stand-off with the United States and its allies, Reuters reported.
On Monday, news agency Yonhap reported North Korea was seen to be making preparations for another ballistic missile launch, possibly of ICBM-class.
Mirroring the concerns, MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.75 percent with South Korea's main index down 1 percent.
At 0705 GMT, the S&P BSE Sensex fell 0.86 percent at 31,617 while the broader NSE Nifty declined 0.90 percent at 9,884.
Barring Coal India, rest all the stocks on the benchmark index was down between 1 percent to 3 percent.
HDFC Bank and Housing Development Finance Corp were down for a second straight session, trading 0.9 percent and 0.7 percent lower respectively.
The Nifty Auto index fell 0.8 percent after gaining nearly 2 percent on Friday when most automakers reported August sales numbers.
Meanwhile, Coal India Ltd surged as much as 2.9 percent after the miner said on Friday that the company along with its units produced 37.63 million tonnes of coal in August, beating its target of 36.96 million tonnes.
Federal Bank rose 1.6 percent after Jefferies India initiated 'buy' rating on the stock and increased its target price to Rs 140 a share from Rs 110 earlier.
Market breadth was in the favour of losers, with about 2 stocks declining to every 1 stock that advanced.