The 30-share BSE benchmark slumped 843.79 points or 1.46 per cent to settle at 57,147.32. During the day, it tanked 940.71 points or 1.62 per cent to 57,050.40.
The broader NSE Nifty fell 257.45 points or 1.49 per cent to end at 16,983.55.
In the 30-share Sensex pack, IndusInd Bank, Nestle India, Tata Steel, Tech Mahindra, Infosys, Dr Reddy's, Titan and Reliance Industries were the major laggards.
On the other hand, Axis Bank and Asian Paints mustered gains.
Elsewhere in Asia, markets in Seoul, Tokyo and Hong Kong ended lower, while Shanghai settled in the green.
Stock exchanges in Europe were trading in the negative territory in mid-session deals. The US markets had ended lower on Monday.
"Investors are becoming risk-averse due to rising geopolitical turmoil as well as worries about the global economic slump. Investors' caution ahead of the announcement of inflation data prevented a better-than-expected start to IT earnings from improving market mood," said Vinod Nair, Head of Research at Geojit Financial Services.
However, as compared to global counterparts, domestic selling is not as aggressive since FII selling is primarily absorbed by DIIs, Nair added.
Meanwhile, the international oil benchmark Brent crude futures declined 2.59 per cent to USD 93.70 per barrel.
Foreign institutional investors offloaded shares worth a net Rs 2,139.02 crore on Monday, according to data available with BSE.
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