The rupee falling to a four-month low in early trade on heavy capital outflows over expectation of rate hike by the US Federal Reserve came as a dampener to the market sentiment.
The BSE 30-share barometer tanked 231.79 points, or 0.72 per cent, to 32,138.25. The gauge had lost 53.72 in the previous three sessions.
All sectoral indices led by metal, bankex, PSU and realty were trading in the negative terrain, falling by up to 1.56 pr cent.
Weak Asian cues after China's sovereign rating was downgraded by agency on fears over its ballooning debt and sustained foreign fund outflows, too negatively impacted sentiments, they added.
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The rupee fell 31 paise to 65.12 against the dollar, its lowest level since May 23 in early trade at forex market.
The laggards were ICICI Bank, Tata Steel, Coal India, Axis Bank, Bajaj Auto, L&T, SBI, ONGC, Reliance Industries, Hero MotoCorp, TCS, Infosys and NTPC, falling by up to 2.09 per cent.
In the Asian region, Hong Kong's Hang Seng fell 0.78 per cent, Japan's Nikkei shed 0.29 per cent, while Shanghai Composite Index down 0.59 per cent in their late morning deals.