The 30-share Sensex, which had lost 366 points in the previous session, fell further by 66.60 points, or 0.40 per cent to 16,479.59 -- a level last seen on January 18.
On similar lines, the broad-based National Stock Exchange index Nifty lost 25.15 points to close at 4,974.80 led by poor show in banking and interest-sensitive sectors.
Brokers said domestic markets opened weak in negative zone on global cues. US markets had closed in red yesterday and European markets opened on a mixed note today, they said.
The sentiment turned more bearish after Asian stocks dropped to their lowest levels in more than three months, as political tension in Greece heightened concern that Europe's debt crisis might worsen, market participants said.
In the Sensex pack, Reliance Industries fell for the sixth day by losing 1.91 per cent to Rs 695.10 after the company yesterday cut estimates for proven gas reserves in its domestic blocks.
IT major Infosys lost 1.01 per cent to close at Rs 2,367.70 following weak economic outlook in Europe, an important geography for the IT industry.
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SBI, HDFC and ICICI Bank were also among major Sensex losers.
Led by DLF, the BSE-Realty index shed 3 per cent today and was the worst performer amongst sectoral indices. It was followed by BSE-Metal index (down 2.06 per ), BSE-Banking index (-1.89 per cent) and BSE-Power index (-1.84 per cent).