The Nifty50 on the National Stock Exchange also slumped and was around the 10,700-mark level during the afternoon session.
Weakness in the Asian markets and depreciation in the Indian rupee dampened the domestic market sentiments, analysts said.
At 1.32 p.m., the Sensex traded at 35,747 points, lower by 262.84 points or 0.73 per cent from the previous close of 36,009.84 points.
It had opened at 36,113.27 points and touched an intra-day high of 36,124.94 and a low 35,691.75 points.
The Nifty50 traded at 10,708.60, lower by 86.35 points or 0.80 per cent from the previous close of 10,794.95 points.
The rupee was trading around 70.80 (1.32 p.m.) against the previous close of 70.49 per dollar.
Except IT and Teck (technology, media and entertainment) stocks, all the sectoral indices declined during the day, led by heavy selling pressure in banking, capital goods and auto stocks.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)