The benchmark BSE Sensex fell over 200 points in early trade after opening marginally higher as Asian shares pulled back, weighed by concerns about China's economy.

At 9.30 a.m., the 30-share BSE index Sensex was trading lower by 202.79 points or 0.64 per cent at 31,719.65 and the 50-share NSE index Nifty was trading down by 64.15 points or 0.64 per cent at 9,900.25.

All BSE sectoral indices were trading in the negative zone. Among them, capital goods index fell the most by 2.24 per cent, followed by consumer durables 1.93 per cent, healthcare 1.83 per cent and metal 1.65 per cent.

Major Sensex losers were Adani Ports (-3.8%), Lupin (-2.72%), Axis Bank (-2.65%), State Bank of India (-2.18%) and Tata Steel (-1.92%), while the major gainers were Power Grid (+1.26%), HUL (+0.52%), TCS (+0.51%), NTPC (+0.3%) and ICICI Bank (+0.27%).

Meanwhile, FIIs have sold domestic stocks worth $2.66 billion between August 1 and the third week of September, making it the biggest pullout of any major emerging market. The outflows exceeded those from major emerging markets such as South Korea, Taiwan, Indonesia and South Africa.

MSCI's broadest index of Asia-Pacific shares outside Japan handed back earlier modest gains and was last down 0.35 percent with losses across the regions weighing.

Chinese stocks remained shaky after falling towards the end of last week following the Federal Reserve's hawkish policy stance and S&P's downgrade of China's sovereign rating.

Hong Kong's Hang Seng was down 0.8 per cent and Shanghai slipped 0.3 per cent after a number of Chinese cities rolled out new cubs to further slow home property sales.

South Korea's KOSPI shed 0.4 per cent, while Japan's Nikkei bucked the trend and rose 0.6 per cent thanks to the yen's weakening against the dollar.

The S&P 500 and Nasdaq had closed slightly higher on Friday as worries about the Graham-Cassidy proposal to reform US health insurance eased and investors shrugged off concerns about North Korea.