The 30-share index, which had lost 385.73 points in the previous two sessions, fell by another 51.25 points, or 0.20 per cent, to 25,139.23 in early trade with FMCG, realty, power, banking, oil and gas, capital goods and PSU sector stocks leading the fall.
The broader NSE Nifty of the National Stock Exchange too moved down by 4.95 points, or 0.07 per cent, to 7,528.60.
Brokers said the sentiment was mostly affected by rising global crude prices on escalating tension in Iraq and concerns about inflation which surged to five-month highs in May.
Rising prices of essential food items like vegetables, fruits and cereals, pushed up inflation to five-month high of 6.01 per cent in May.
Continued selling by foreign funds and retail investors largely after the rupee weakened to a fresh six-week low of Rs 60.50 also dampened the trading sentiments here.
In other Asian markets, Hong Kong's Hang Seng fell by 0.27 per cent, while Japan's Nikkei moved up by 0.50 per cent in early trade today.
The US Dow Jones Industrial Average ended 0.03 per cent higher in yesterday's trade.
Sensex flattish in early trade on global cues, weak rupee
(Reuters) BSE Sensex little changed as losses in some heavyweights offset by gains in technology stocks.
The benchmark BSE index down 0.03 percent while the broader NSE index is 0.06 percent lower.
Overseas investors, who have played a key role in the near 23 percent gain in Indian markets so far this year, sold shares worth a net 1.94 billion rupees on Monday after three days of buying.
Asian shares struck a cautious tone as the double-whammy of a deepening conflict in Iraq and a gas dispute between Ukraine and Russia sapped investors' appetite for risk.
Investors take profits in some heavyweights including Housing Development Finance Corp and Mahindra and Mahindra Ltd. HDFC is down 1.75 percent while Mahindra and Mahindra Ltd falls 1.8 percent.
However, export-oriented stocks such as technology gain for a second straight day. Infosys Ltd is up 0.6 percent, Tata Consultancy Services Ltd 0.9 percent and Wipro Ltd higher 0.8 percent.