Indian shares fell 3 per cent in early deals on Thursday, spooked by falls in Asian markets and signs of a slowdown in the local economy, with banks under pressure as investors worried about global credit markets.
Shares in ICICI Bank, India's leading private bank, fell 3.1 per cent to 852.30 rupees and State Bank of India fell 3.3 per cent to 1,747.90 rupees.
The banking sector index fell 3.2 per cent.
"We cannot get away from the fact that the back of the market has been broken," said Deepak Singh, an independent analyst from Bangalore.
"Now, there is a new worry, the slowing Indian economy. I see a distinct possibility that market may start discounting a slower GDP growth," he said.
At 10:11 am or (0441 GMT), the benchmark BSE 30-share index was down 2.59 per cent or 417.93 points at 15,710.05, with 27 components in the red. It fell as much as 3.05 per cent in the first few minutes of trade.
The index is 26 per cent below a life high of 21,206.77 hit on January 10 and more than 22 per cent down this year.
In the broader market 1,238 losers beat 292 gainers in an initial volume of more than 32 million shares.
India's annual industrial output growth slowed to 5.3 per cent in January, well below expectations, posing a dilemma for policy makers faced with decelerating economic growth and accelerating inflation.