Moreover, caution ahead of GDP data for the June quarter to be released in the day, too influenced trading sentiments.
The 30-share index fell 147.29 points or 0.55 per cent to 26,245.09 as metal, power, realty, PSU, bank, capital goods and auto sector stocks succumbed to profit-booking.
The gauge had risen by 677.72 points in the previous two sessions.
The NSE Nifty dropped 40.90 points or 0.51 per cent to 7,961.05 in early trade.
Brokers said besides profit-booking by participants, a weak trend at other Asian markets after the US Federal Reserve indicated it may go ahead with an interest rate hike in September, dampened trading sentiments.
The US Dow Jones Industrial Average ended 0.07 per cent lower in Friday's trade.