The 30-share index fell by 206.61 points, or 1.01 per cent, to 20,057.10, with shares of banking, realty, oil and gas and auto sectors leading the fall. It had plunged by 382.93 points in the previous session on Friday.
Similarly, the National Stock Exchange index Nifty declined by 55.25 points, or 0.92 per cent, to 5,956.85.
Brokers said increased selling by funds as well as retail investors after RBI Governor Raghuram Rajan on Friday unexpectedly raised repo rate to combat inflation, mainly dampened the trading sentiments.
They said absence of cues from the overseas bourses, as Japan and Hong Kong markets are closed today for a public holiday, also forced funds to reduce their positions.