Mumbai, January 31: The benchmark Sensex dropped below the 36,000-mark by falling over 124 points in early session today as participants trimmed positions ahead of the Union budget amid fresh outflow by foreign funds.

The 30-share index fell by 124.28 points or 0.34 percent at 35,909.45 in the opening session as consumer durables, capital goods, IT, healthcare and teck stocks dropped. The index had dropped 249.52 points in the previous session. The 50-share NSE Nifty was trading lower by 38.95 points, or 0.35 percent, at 11,010.70.

Sentiment turned cautious as investors preferred to reduce their positions ahead of the Union budget to be presented tomorrow. Foreign funds sold shares worth Rs 105.56 crore, while domestic institutional investors offloaded equities worth 281.65 crores yesterday, provisional data showed.

A weak trend in Asia coupled with an overnight sell-off on the Wall Street dampened the sentiment here, traders added. In the Asian region, Japan's Nikkei was down 0.11 percent, Shanghai Composite Index shed 0.10 percent, while HongKong's Hang Seng fell 0.03 percent in early deals. The US Dow Jones Industrial Average ended sharply lower by 1.37 percent yesterday.