The 30-share barometer dropped by 402.22, or 2.37 per cent to 16,464.75 at 1200 hrs with all sectoral indices trading in the negative zone.
The broad-based National Stock Exchange index Nifty tumbled by 128.20, or 2.47 per cent to trade below 5,000 level at 4,931.25 at the same time.
Industrial growth falls to a meagre 3.3 per cent in July as against 9.9 per cent in the same month last year which affected negatively the trading sentiments.
The Asian markets also slumped on renewed concerns that Greece would default on its debt repayments amid a warning from Germany.
Big losses in Europe and on the Wall Street on Friday fuelled the selling pressure among foreign investors.