The 30-share BSE benchmark fell 282.85 points to 55,483.37. The broader NSE Nifty declined 88.8 points to 16,542.20.
Among the Sensex constituents, Dr Reddy’s Lab, Nestle, Infosys, Asian Paints, HCL Technologies, TCS, Kotak Mahindra Bank and Larsen & Toubro were the biggest laggards in early trade.
Bajaj Finserv, Tata Steel, Bajaj Finance and Reliance Industries were among the gainers.
In Asia, markets in Tokyo traded lower, while Shanghai, Seoul and Hong Kong quoted higher.
The US markets had ended on a mixed note on Monday.
“Investors are likely to be in a wait-and-watch mode as all eyes will be on the Fed rate decision on July 27. Also, July F&O series expiry this Thursday shall keep markets volatile,” said Prashanth Tapse – Research Analyst, Senior VP (Research), Mehta Equities Ltd.
The BSE benchmark fell 306.01 points or 0.55 per cent to settle at 55,766.22 on Monday. The Nifty dipped 88.45 points or 0.53 per cent to 16,631.
Meanwhile, international oil benchmark Brent crude jumped 1.39 per cent to 106.61 per barrel.
Foreign institutional investors offloaded shares worth ₹844.78 crore on Monday, as per exchange data.