The Sensex dived below the 34,000 points mark in trade, dropping 270 points, following a weak set of cues from global markets.
A weak closing of the US Dow Jones, following a sell-off in banks dragged sentiments there and pushed Asian indices lower. Rising bond yields in the US were among reason for the huge unwinding in Asian stocks.
The Sensex was last seen trading below the 34,000 points mark at 33,862 points, while the Nifty was down 87 points at 10,159 points.
Asian Paints led losers from the Sensex, after its numbers disappointed the markets. The stock was down a huge 5 per cent in trade. ONGC, Hindustan Unilever, ITC and Reliance were among the other losers in trade.
Tata Motors, whose stock has been hammered over the last couple of weeks, was among the few stocks from the Nifty that saw good gains. Adani Ports and Dr Reddy's were among the other stocks that lent support to the markets.
All 19 sector gauges compiled by BSE were trading lower led by the S&P BSE Oil & Gas Index's 1.5 percent drop.
Meanwhile, the rupee was trading marginally lower at 73.75 to the dollar, after closing at 73.57 on Monday.