Investors were also cautious ahead of October's expiry in the derivatives segment on Thursday.
The 30-share index declined 91.22 points, or 0.32 <g data-gr-id="22">per cent</g>, to 28,087.86. Metal, oil and gas, realty, PSU and power stocks ran up most losses.
The NSE Nifty broke the 8,700-mark by falling 22.45 points, or 0.26 <g data-gr-id="21">per cent</g>, at 8,686.50.
Brokers said sentiment was downbeat after Mistry was removed as chairman of India's largest conglomerate Tata Group and replaced by his predecessor Ratan Tata in the interim, a development that can trigger a confrontation between the single-largest shareholder and the company's founding family.
Major Tata group stocks such as Tata Steel, Tata Communications, Tata Steel, Tata Motors, Tata Power, Tata Chemicals and TCS all bore the brunt and fell by up to 3 <g data-gr-id="25">per cent</g>.
In the rest of Asia, Hong Kong's Hang Seng was down 0.20 <g data-gr-id="23">per cent</g> and Shanghai Composite fell 0.06 <g data-gr-id="24">per cent</g> in early trade. Japan's Nikkei was trading in the positive zone, rising 0.62 per cent.
The Dow Jones Industrial Average had ended 0.43 per cent higher yesterday.