The 30-share barometer, which had lost 50.86 points in yesterday's trade, fell further by 114.54 points, or 0.69 per cent, to 16,553.47 in early trade.
All sectoral indices, led by capital goods and power, were trading in the negative zone with losses up to 0.56 per cent.
Similarly, the wide-based National Stock Exchange Nifty index declined by 27.65 points, or 0.54 per cent, to 5,040.70.
Brokers said market sentiment remained weak on continued capital outflows by foreign funds following weakening trend in global markets.
US stocks fell on Monday as Europe's aid package for Spanish banks did little to alleviate investor concerns about the euro zone's finances and a slowdown in the wider global economy, they said.
In the Asian region, the Hong Kong's Hang Seng index fell 0.92 per cent, while Japan's Nikkei shed 1.28 per cent in the morning trade today. The US Dow Jones Industrial Average ended 1.14 per cent lower in yesterday's trade.
