Indian shares slumped on Friday, a day after the government ended a tax break on certain equity investments.
Finance Minister Arun Jaitley in his budget speech on Thursday announced that the profits exceeding Rs 100,000 from shares held for more than a year will be taxed at 10 percent.
The budget also raised spending concerns after the fiscal deficit target was revised to 3.5 percent for 2018-19 as against the earlier target of 3 percent.
Mirroring the worries, the 10-year bond yield hit fresh 22-month high while the rupee was trading at 64.10, down 0.15 percent from its previous close of 64.03.
At 0620 GMT, the S&P BSE Sensex declined 1.4 percent to 35,407 while the broader NSE Nifty dropped 1.36 percent to 10,867.
Among the top Sensex laggards, Yes Bank fell 3 percent, HDFC declined 2.9 percent, Maruti Suzuki dropped 2.8 percent while ONGC was down 2.7 percent.
But cigarette stocks were higher after no major announcement of excise duty hike on cigarettes in the budget. ITC rose 0.7 percent while VST Industries gained 0.4 percent.
Market breadth was in the favour of gainers, with about 2 stocks advancing to every 1 stock that declined.
In Asia, shares declined, with Korean and Japanese benchmark indices falling more than 1 percent amid talks of policy tightening in Europe.
U.S. oil rose for a third straight session after a survey showed strong compliance with output cuts by OPEC and others including Russia, offsetting concerns about surging U.S. production.
MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.3 percent and away from a record high, Reuters data showed.