This is the third straight day of losses for the indices, which fell for the second week on the trot.
Shares of Realty, Power, FMCG, Consumer Durable, Auto and Capital good sectors were major losers of the day.
Small-cap and Mid-cap indices also dropped by 2.14 percent and 1.49 percent respectively as retail investors offloaded shares.
" are...awaiting the 4Q results, which are expected to be subdued," said Dipen Shah, Head of PCG Research, Kotak Securities.
The BSE Sensex resumed slightly lower at 28,465.44 and moved down further to 28,209.66 before ending at 1-1/2 month low at 28,261.08 -- a net loss of 208.59 points or 0.73 percent from its last close. This was its weakest close since February 9, 2015 when it ended at 28,227.39.
The Sensex has now lost 475.30 points or 1.65 percent in three consecutive days.
Meanwhile, the NSE 50-share Nifty dropped by 63.75 points or 0.74 percent to end at 8,570.90.
Jayant Manglik, President-retail distribution, Religare Securities said: "Tracking weak global cues, equity benchmarks made a sluggish start and upheld that bias till the end. Besides, depreciation in Indian rupee too weighed down sentiments but that helped IT counters to end in green while all the other sectoral indices reeled under pressure."
Overcoming obstacles, the Mines and Minerals bill was on Thursday passed by Parliament. Later, Coal Bill was passed by Rajya Sabha.
Asian markets ended mixed even as investors booked profits after the previous day's rally that was fuelled by the Federal Reserve's dovish stance on interest rates.
Key indices in China, Japan, Singapore and Taiwan ended 0.13 percent to 0.98 percent higher while indices in Hong Kong and South Korea fell in 0.03-0.38 percent range.
European markets were trading higher amid renewed hopes for progress on the Greek debt front. Key indices in the UK, France and Germany were up by 0.07 percent to 0.56 percent.

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