The 30-share barometer, which had lost 255.69 points in the previous session, fell further by 161.89 points, or 0.78 per cent, to 20,473.24.
Stocks of banking, realty, capital goods, FMCG and oil and gas sectors were major losers, pulling down the benchmark Sensex.
Similarly, the wide-based National Stock Exchange index, Nifty, declined by 53.10 points, or 0.87 per cent, to 6,069.80.
Brokers said sustained selling by funds amid a mixed trend in Asian region following overnight losses at the US market after minutes from the Federal Reserve’s October meeting showed it was considering winding down its stimulus in coming months mainly influenced the trading sentiment here.
In the Asian region, Hong Kong’s Hang Seng index traded lower by 0.17 per cent but Japan’s Nikkei Index rose 1.63 per cent in early trade.
The US Dow Jones Industrial Average ended 0.41 per cent lower in yesterday’s trade.