This was its lowest closing in nearly two weeks.
Investors' appetite took a hit over the gridlock in Parliament about the key GST Bill and global volatility after a devaluation of the yuan, brokers said.
The NSE Nifty too slipped below 8,500 as SBI, Tata Steel, Hindalco and Coal India slumped amid earnings disappointment.
Weakness in the rupee, which lost 40 paise against the dollar at 64.27 intra-day, queered the pitch further.
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The Rajya Sabha was adjourned for the day after the government moved the GST Bill.
The gauge has now lost 432.04 points in three straight days.
The 50-share Nifty gave in to selling pressure and settled the day lower by 63.25 points, or 0.74 per cent, at 8,462.35.
Metal stocks bore the brunt after base metals retreated in global markets after China devalued its currency.
Of the 30-pack Sensex, 23 ended with losses while 7 others ended with gains.
SBI slumped 4.87 per cent despite posting a 5.9 per cent increase in net profit for the June quarter on the back of a decline in bad loans.
Selling also emerged in other state-owned banking stocks such as PNB and Bank of Baroda.
Hindalco, Tata Motors, Coal India and Vedanta Ltd too contributed to the fall.
Bucking the trend, IT stocks such as Infosys, TCS and Wipro, which get their revenues in dollar, rose up to 2.07 per cent, backed by a rising greenback.
In line with overall trends, broader markets small-cap and mid-cap indices fell 1.13 per cent 0.46 per cent, respectively.
Major Asian markets ended in the red. European markets were down too in their early trade.