The 30-share barometer, which had lost 358.54 points in the previous two sessions, fell by 84.16 points, or 0.32 percent, to trade at fresh two-month low of 26,187.81.
Similarly, the National Stock Exchange index Nifty moved down by 25.70 points, or 0.32 percent, to 7,826.70.
Brokers said sentiments have been affected on persistent capital outflows by foreign funds and a weak trend at other Asian markets following a US and European sell-off that came in response to weaker German data and the IMF's decision to cut its growth forecast for the global economy.
Among other Asian markets, Japan's Nikkei was down 1.47 percent, while Hong Kong's Hang Seng shed 0.81 per cent in morning trade.
US Dow Jones Industrial Average ended 1.60 percent down in Tuesday's trade.