The 30-share index fell by 108.10 points, or 0.32 per cent, to 32,761.62 as power, metal, infrastructure, capital goods, IT, teck, banking and auto stocks declined.
The gauge had gained 36.78 points in the previous volatile session.
The RBI's two-day monetary policy review kicks off today and the decision is due tomorrow. This has led to selling by investors, which added to the negative mood.
Weak Asian cues as technology stocks tracked a sell-off in their US counterparts that saw the Nasdaq tumbling over 1 per cent overnight, weighed on the sentiments, brokers said.
Major losers that dragged down the key indices include Adani Ports, NTPC, Tata Steel, Power Grid, Bajaj Auto, Wipro, Coal India, Hero MotoCorp, HDFC Bank, ONGC, L&T, Dr Reddy's and SBI.
Among other Asian markets, Hong Kong's Hang Seng was down 0.39 per cent while Japan's Nikkei shed 0.42 per cent in early session today. Shanghai Composite Index too shed 0.02 per cent.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)