The S&P BSE Sensex index fell as much as 137.62 points to 40,130.00 in early trade and the NSE Nifty moved to 12,042.90, down 45.65 points from the previous close.
At 9:17 am, the Sensex traded 111.28 points - or 0.28 per cent - lower at 40,156.34 while the NSE Nifty was down 35.65 points - or 0.29 per cent - at 12,052.90.
Top laggards on the 50-scrip benchmark index were Zee Entertainment, Bharat Petroleum, HCL Tech, TCS and Infosys, trading between 1.14 per cent and 1.84 per cent lower.
TCS, Infosys and ICICI Bank weighed the most on Sensex.
Losses across Asian equity markets followed falls on Wall Street overnight that saw the Nasdaq drop into correction territory. MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.3 per cent, after earlier rising as much as 0.18 per cent. The broad index was pulled lower by Chinese shares, with the country's blue-chip CSI300 index trading 1.17 per cent lower, and the Hang Seng down 0.65 per cent.
Japan's Nikkei gave up early gains to turn down 0.42 per cent. Seoul's Kospi gave up 0.16 per cent.
Wall Street had a volatile session overnight as weak economic indicators and an intensifying China-US trade war inflamed concerns about global growth, supporting safe-haven assets such as bonds. The S&P 500 lost 0.28 per cent and the Dow Jones Industrial Average eked out a 0.02 per cent gain.
On Monday, the Sensex and Nifty rose 1.4 per cent each to end at an all-time closing highs.