The Sensex resumed lower at 21,134.10 and dropped further to 21,000.45 before quoting at 21,018.03 at 1045 hrs, showing a loss of 221.33 points or 1.04 per cent from its last close.
The Sensex had gained by 669.08 points or 3.25 per cent in the last five trading days.
The NSE 50-share Nifty also fell by 62.65 points or 0.99 per cent to 6,254.70 at 1045 hrs.
Asian stocks fell in their early trade amid speculation that a meeting of China's top party officials this weekend may struggle to meet market expectations for economic reforms in the world's second biggest economy.
Key benchmark indices in China, Japan, Hong Kong, Taiwan, Indonesia, and South Korea shed 0.12 per cent to 0.56 per cent while Singapore's Straits Times rose 0.36 per cent.