The benchmark BSE Sensex plunged over 200 points, while the NSE Nifty fell over 70 points on sustained foreign fund outflows and selling by domestic investors.
Moreover, investors grew increasingly worried over a possible delay in the passage of the key GST Bill amid weak global cues.
Sentiment was dampened on offloading of positions by cautious participants ahead of the key economic data, industrial production numbers for October, due later today.
Besides, a weak trend in global markets as investors prepared for the outcome of next week’s Fed policy meet which probably will hike interest rates for the first time in a decade accelerated selling activity here.
The 30-share BSE index Sensex plunged 207.89 points or 0.82 per cent at 25,044.43 and the 50-share NSE index Nifty dropped 72.85 points or 0.95 per cent at 7,610.45.
Among BSE sectoral indices, realty index fell the most by 2.52 per cent, followed by banking 2.25 per cent, auto 1.71 per cent and consumer durables 1.46 per cent. On the other hand, metal index was up 0.23 per cent and IT 0.14 per cent.
Top five Sensex gainers were Tata Steel (+3.41%), Hindalco (+0.73%), Cipla (+0.66%), HUL (+0.6%) and Infosys (+0.57%), while the major losers were ICICI Bank (-3.6%), Tata Motors (-2.92%), Axis Bank (-2.22%), State Bank of India (-2.09%) and L&T (-1.99%).
Bank stocks today fell on fears of higher provisions for bad debts.
Cement stocks gained as much as 4.5 per cent today after the Competition Appellate Tribunal has set aside Rs. 6,316.59 crore penalty imposed on 11 cement firms by the Competition Commission of India on cartelisation charges.
Auto stocks today fell on media reports over Delhi diesel vehicles. Steel stocks were top gainers on BSE today.
A report by SMC Global said: "Asian shares edged higher today but remained on track for a weekly loss as lower crude prices kept markets on edge after a broad rout in commodities heightened fears about receding global growth. US stocks rose on Thursday as investors snatched up beaten-down energy-company shares. US initial jobless claims climbed to 282,000, an increase of 13,000 from the previous week's unrevised level of 269,000. Economists had expected jobless claims to inch up to 270,000. With the bigger than expected increase, jobless claims reached their highest level since hitting 296,000 in the week ended July 4th."
European shares fell on Friday as weak commodity prices put pressure on markets before a widely expected rise in US interest rates next week.
The pan-European FTSEurofirst 300 index fell 0.5 per cent to hover near two-month lows, while the euro zone's blue-chip Euro STOXX 50 index also declined by a similar amount.
Asian shares were set for sizeable weekly losses, with equities faltering again on Friday as plunging crude prices and a tumble in China's yuan to almost 4-1/2-year lows added to worries about receding global growth.
US stocks had closed higher on Thursday after a three-day decline but sharply pared gains late in the session as oil dropped to near seven-year lows and the strong dollar weighed on the sentiment.