The 30-share index, which had lost 366.53 points in the previous session, fell further by 86.20 points, or 0.52 per cent, to 16,459.98 with stocks of realty, banking and metal sectors leading the fall.
On the similar lines, the wide-based National Stock Exchange index Nifty declined by 28.60 points, or 0.57 per cent, to 4,971.35.
Brokers said sentiment remained bearish after RBI Deputy Governor Subir Gokarn's comment that there is little room for further reduction in interest rats in view of inflationary pressure, triggering selling pressure by participants.
In addition, a weak trend on other Asian bourses following overnight losses at the US market on investor worries over political uncertainty in Greece was another factor behind fall in stock prices, they said.
In the Asian region, the Hong Kong's Hang Seng index fell by 0.77 per cent, while Japan's Nikkei index was down by 1.19 per cent in early trade today. The US Dow Jones Industrial Average ended 0.59 per cent lower in yesterday's trade.