The benchmark BSE Sensex plummeted by 562.88 points on Friday to hit nearly 14-month low of 25,201.90 amid heavy selling in global equities ahead of the US jobs report.
Friday's closing was the lowest level since July 14, 2014 when the index had closed at 25,006.98.
Experts say a strong non-farm payrolls data is expected to allow Federal Reserve to consider a September rate hike.
"The global risk is getting highlighted with the focus mounting on the prospects of a US rate hike soon," said Vinod Nair, head - fundamental research at Geojit BNP Paribas Financial.
Fresh weakness in the rupee against dollar also weighed.
On a weekly basis, the Sensex lost 1,190.48 points or 4.51% and Nifty fell 346.90 points or 4.33%. This is the fourth straight weekly plunge for both the indices.
On the day, the NSE Nifty also cracked the 7,700-level.
Gaurav Jain, director of Hem Securities, blamed continued selling pressure by the foreign investors, weakness in rupee and global jitters for the sell-off.
The 30-share index stayed in the negative zone for most part of the day and touched a low of 25,119.06 before ending at 25,201.90, a steep fall of 562.88 points or 2.18%.
The gauge had gained 311.22 points in Thursday's trade.
The broader NSE Nifty also succumbed to all-round selling and slipped below the crucial 7,700-mark to settle the session 167.95 points or 2.15% down at 7,655.05.
In broader markets, small-cap and mid-cap indices closed lower by 2.47% and 1.90%, respectively.
Vedanta was the top Sensex loser, tumbling 4.84%, followed by GAIL 4.73%.
Out of 30-share Sensex pack, 28 fell, while only Bharti Airtel and Coal India managed to buck the trend.
Sectorally, BSE realty index suffered the most by plunging 3.32%, followed by infra 3.24%, power 3.03%, bankex 2.65%, healthcare 2.42% and IT 2.34%.
Among other Asian markets, Japan's Nikkei fell 2.15% and Hong Kong's Hang Seng shed 0.45%, while Chinese financial markets remained closed on Friday.
European markets were also in deep red on anticipations of a strong US jobs data.