The S&P BSE Sensex fell over 800 points in intraday trade on Friday, while 50-share Nifty index suffered its biggest percentage drop since July 2009. 

The fall was led by sharp selling in frontlinestocks on fears of U.S. stimulus tapering which could start as soon as next month may FII flows and capital control measure adopted by the Reserve bank of India also fuelled bearish sentiment. 

The Reserve Bank of India (RBI) announced certain measures late on Wednesday to restrict how much its citizens and companies can invest abroad. This raised fears of outright capital controls that would further undermine the confidence of foreign investors. 

Tracking the momentum that hit 52-week low include stocks like Yes Bank, Bank of India,BHELBSE -10.70 %, L&T, MCX, Punjab National BankBSE -7.00 %, SpiceJet and UCO Bank. 

The Nifty witnessed intense selling pressure and briefly breached 5,500 level in intraday trade as institutional investors booked profits in Indian companies on economic growth, rising interest rate concerns and depreciating rupee. 

Weakness in rupee has been a major drag on markets, hitting fresh record low of 62.03 against the US dollar in intraday trade. 

The 50-share index closed at 5,507.85, down 234.45 points or 4.08 per cent. It touched a high of 5,716.60 and a low of 5,496.05 in trade today. 

The S&P BSE Sensex ended at 18,598.18, down 769.41 points or 3.97 per cent. It touched a high of 19,310.95 and a low of 18,559.65 in trade today. 

Levels of 5500 on the Nifty which is still considered a strong support for the Nifty index may come under threat if rupee continues to depreciate against the dollar, say analysts. 

"The view is very clear that level of 5500 still hold a strong support for the Nifty. In past we have seen many times, markets bouncing back from this level; however the intensity of the bounce is getting lower and lower," said Ashwani Gujral of ashwanigujral.com. 

"There is a tectonic shift that is happening in the markets because of the weakness in rupee. Chances are rupee should head lower towards 64 and that should lead to a breaking of this 5500 to 6100 zone on the downside," he added. 

Gujral is of the view that the more the government/RBI try's to fight the rupee, chances are it will go lower and lower. So this is a fairly difficult situation and chances are that 5500 may not hold for a long time, he added. 

Although, Nifty briefly breached this level in intraday trade today and market is not able to hold onto 5500 level - next target is closer to 5400 and then 5300, say analysts. 

"There is a possibility that markets may crack down to 5300 on the Nifty; yes that is very much possible if the momentum continues," said Dilip Bhat, Joint Managing Director, Prabhudas Lilladher in an interview with ET Now. 

"We may see a sharp rise once again back to 5900 to 6000, yes very much possible and both the scenarios possibly can play out over next three to six months," he added. 

Bhat is of the view that the fear psychosis which is making the markets vulnerable and panicky. Government has imposed some kind of partial control on remittances. 

Foreign institutional investors have been crucial part of the rally in 2012 but in the year 2013, the flows are reversed fuelling bearish sentiment in the market. 

Here is a list of top 34 stocks that hit 52-week low in trade on Friday: