The benchmark index was down 0.41 percent while the broader Nifty lost 0.5 percent as of 11:00 a.m.
Markets are tracking weak Asian peers ahead of China flash manufacturing PMI data on Tuesday.
EARLY TRADE: BSE Sensex dips below 27k-level, falls 166 points
The benchmark BSE Sensex dipped below the 27k-level by falling over 166 points in early trade today as funds and retail investors engaged in reducing positions amid a weak trend on other Asian bourses.
The 30-share barometer, which shed 21.79 points in the previous session, fell by 166.32 points, or 0.61 per cent, to slip below the 27,000-mark to 26,924.10.
Stocks of realty, capital goods, metal, auto, power and banking sectors declined due to profit-booking.
Similarly, the National Stock Exchange index Nifty fell below the 8,100-level by declining 56.65 points, or 0.69 per cent, to 8,064.80.
Brokers said increased selling by funds and retail investors in the recent out-performers amid a subdued trend at other Asian bourses on profit-taking, mainly dampened trading sentiment.
Among other Asian markets, Japan's Nikkei Index was down by 0.81 per cent, while Hong Kong's Hang Seng index shed 1.34 per cent in early trade.
The US Dow Jones Industrial Average, however, ended 0.08 per cent higher in Friday's trade.