Moreover, the rupee, which weakened for the fifth day against the dollar, also had its bearing on domestic equities.
The 30-share barometer declined 210.46 points, or 0.81 per cent, to 25,563.15, with auto, banking, IT, FMCG, metal and realty sector stocks leading the fall.
The index had gained 284.04 points in the last two straight sessions.
The NSE Nifty was also trading lower by 64.60 points, or 0.81 per cent, at 7,826.15.
Brokers said besides profit-booking in recent gains, a weak trend at other Asian bourses tracking overnight losses in the US after strong inflation data that fuelled talk of an interest rate hike, dampened the sentiment here.
The Dow Jones Industrial Average ended 1.02 per cent lower in yesterday's trade.