Healthcare, metal and industrial stocks ran up losses.
The September derivative expiry is due on Thursday.
The broader Nifty slipped below the 9,850 level to 9,817.30.
However, realty, consumer durables and utilities witnessed buying interest.
The Sensex traded at 31,437.55 at 1149 hours, down 162.21 points, or 0.51 per cent.
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The broader Nifty was down 45.60 points, or 0.46 per cent, at 9,825.90 at 1149 hours.
The latest warning from US President Donald Trump to North Korea made mood downbeat here.
Big losers were Sun Pharma 2.81 per cent, coupled with Adani Ports, HUL and Coal India.
Most of the other Asian markets gained on positive economic data coming from China and expectations of progress in major tax reforms in the United States.
US stock indices shed earlier gains to close little changed yesterday, with the Dow Industrial Average extending its losing streak.