After opening on a positive note, the 30-share index sank 594.26 points from the day's high and finally settled 345.51 points, or 0.95 per cent, lower at 36,329.01.
Similarly, the NSE Nifty dropped 93.90 points, or 0.87 per cent, to close at 10,705.75.
Bajaj Finance was the top laggard in the Sensex pack, tumbling over 4 per cent, followed by Asian Paints, Bajaj Finserv, HCL Tech, Maruti and Infosys.
On the other hand, IndusInd Bank, SBI, HUL, Tata Steel and ITC were among the gainers.
According to traders, domestic market followed volatility in global equities as rising number of COVID-19 cases across the world stoked concerns over economic recovery.
The number of cases around the world linked to the disease has crossed 1.17 crore and the death toll has topped 5.43 lakh.
In India, the number of infections has spiked to 7.42 lakh, with 20,642 fatalities.
Bourses in Shanghai and Hong Kong ended with gains, while Tokyo and Seoul closed in the red.
Stock exchanges in Europe too began on a negative note.
Meanwhile, international oil benchmark Brent crude futures fell 0.16 per cent to USD 43.01 per barrel.
On the currency front, the rupee depreciated 9 paise to settle at 75.02 against the US dollar. ANS ABM ABM