At 10:15 am, the BSE S&P Sensex was down by 310 points at 38,787 while the Nifty 50 lost by 90 points at 11,498. At the National Stock Exchange, all sectoral indices were in the red.
Nifty PSU bank was down by 2 per cent, auto by 1.5 per cent, financial service and metal by 1.4 per cent each.
Among stocks, Tata Motors was the top loser which erased previous gains by 3.1 per cent to trade at Rs 126.80 per share. Eicher Motors too lost by 2.2 per cent and traded at Rs 18,020.05 apiece.
Banking stocks were in the red with State Bank of India losing by 2.9 per cent and Kotak Mahindra Bank by 2.1 per cent. HDFC slipped by 2.2 per cent. The other prominent losers were Cipla, Hindalco, GAIL, Vedanta and Tata Steel.
However, those which gained were Power Grid Corporation, Tata Consultancy Services, Zee Entertainment, Reliance Industries and power utility major NTPC.
Meanwhile, Asian stocks fell as US lawmakers called for an impeachment enquiry into US President Donald Trump over whether he sought help from Ukraine to smear former Vice President Joe Biden, a front-runner for the 2020 Democratic presidential nomination.
Further, trade concerns emerged with Trump saying that he will not accept a bad deal in trade talks with China as the world's two largest economies meet in early October to end the long-drawn trade war.
MSCI's broadest index of Asia Pacific shares outside Japan was down by 0.2 per cent while Japan's Nikkei fell by 0.55 per cent. Hang Seng slipped by 0.9 per cent, Kospi index by 0.8 per cent and Shanghai Composite by 0.57 per cent.