Indian shares dropped 2.77 percent on Friday, a fourth straight fall that saw the main index slice through key support levels as investors sold on concerns about inflation and fears of nasty surprises in next week's budget.
Selling was broad-based, with ICICI Bank, telecom Bharti Airtel, software exporter Infosys Technologies Ltd. and tobacco maker ITC leading the losses.
The main 30-issue BSE index closed 388.78 points lower at 13,632.53 points, falling through support at 14,000 and the Feb. 14 low of 13,805.36 on its way to its lowest close since Jan. 11. It lost 5.04 percent on the week.
"There is a complete lack of conviction in the market before the budget," Sejal Doshi, chief executive of Finquest Securities, said.
The Union budget will be released on Wednesday.
Twenty-nine of the index's 30 stocks fell. The index ended 7.4 percent below a record high of 14,723.88 hit on Feb. 9.
"There were some rumours in the ring that the budget may have some negative news for some of the industrial sectors. That came as a dampner," said Avinash Gorakshakar, head of research at Emkay Share & Stock Brokers Ltd.
"Inflation is also one of the biggest concerns now."
Data showed inflation for the 12 months to Feb. 10 running at 6.63 percent, only slightly lower than the previous week's rate of 6.73 percent, which was the highest in more than two years.
Bank stocks were big losers on fears inflation could see the Reserve Bank of India (RBI) extend its run of policy tightening measures.
Top lender State Bank of India fell 2.0 percent to a 4-month closing low and leading private bank ICICI Bank dropped 4.3 percent.
Cement maker ACC Ltd. fell 5.0 percent and Gujarat Ambuja Cement Ltd. ended down 3.1 percent on concerns of changes in excise duty in the budget, traders said.
Infosys fell 2.2 percent, the fourth straight fall for the index's second-most heavily weighted stock, while ITC dropped 4.6 percent on fears of an increase in duty on cigarettes.
Technical analysts said the outlook was bearish because the BSE index had fallen below last week's low and also pierced a key trend-line support.
"The crucial level of 13,800 has been broken. It is very clearly bearish. I expect it to touch 13,250-13,350 and then some buying should emerge," said Sandeep Wagle, chief technical analyst at Angel Broking.
"The momentum is very clearly visible that 13,300 is very likely, so why buy before that? And if 13,250 is broken then 12,800 is very likely."
The mood was strongly negative in the broader market, where 2,209 losers easily defeated 385 gainers on volume of 238 million shares.
The 50-issue NSE index fell 2.50 percent at 3,938.95, it lowest close since Jan 10.
Elsewhere in the region, the Colombo All-Share index fell 0.10 percent to 2,986.74 points, while the Karachi 100 index gained 0.56 percent to 11,607.84.