Tension flared up between the US and North Korea over the the latter's ballistic missile programme, which cast a shadow on domestic stocks here.
Healthcare, auto and financial stocks lagged.
Selling pressure also gathered momentum following muted June quarter earnings by some companies, they added.
The Sensex recovered partially before settling down 216.35 points, or 0.68 per cent, at 31,797.84 -- its lowest closing since July 18.
The gauge has now lost 527.57 points in three sessions.
Overseas, Asian stocks ended lower and European shares were down in their early deals.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)