The 30-share barometer, which had closed higher by 40 points in yesterday's session, tumbled by 231.97 points, or 1.44 per cent, to 15,838.51.
The wide-based National Stock Exchange index Nifty too dipped below the crucial 4,800 points level. It was trading lower by 73.80 points, or 1.51 per cent, to 4,796.40.
Brokers said continues selling by funds amid a weak trend in the global markets on European worries, with Greece's woes deepening and Spain falling into recession triggering selling by foreign funds.
In addition, weakening rupee, which yesterday had slid to 54.60 intra-day, before closing at 54.47, also dampened the trading sentiments, they said.
All sectoral indices were trading in the negative zone with losses of up to 2.18 per cent.
In the Asian region, the Hong Kong's Hang Seng index fell by 2.23 per cent, while Japan's Nikkei was down by 2.44 per in the early trade.
The US Dow Jones Industrial Average lost 1.24 per cent in yesterday's trade.