Stock market slides to 32-month low, investors lose Rs 10 lakh crore

The stock market on Thursday fell by 1.4% to a 32-month low amid tighter monetary conditions, increasing global oil prices and continued outflow of foreign funds.

The benchmark Sensex index fell by more than 1,040 points to end just below 71,600. The index was at 75,000 during this time last month. The Nifty 50 fell by 371 points to 22,200, an 18-month low.

Investors lost more than Rs 10 lakh crore during the day.

The India VIX index, which measures volatility in the market, spiked 10%.

Foreign investors have sold securities worth $4.8 billion in nine days, taking the net outflows this year to a record $30.4 billion, Reuters reported.

The Reserve Bank of India on Wednesday increased the repo rate by 25 basis points to 5.5%. This was the first hike in the lending rate in nearly four years.

After the repo rate was revised, the market had fallen by more than half a percent on Wednesday.

The repo rate is the interest rate at which the central bank lends money to commercial banks.

Central banks usually increase key lending rates to control inflation. Higher key lending rates translate to higher interest on loans disbursed by commercial banks. This, in turn, keeps a check on discretionary spending by consumers which is expected to help curb price rise due to high inflation.

Meanwhile, the price of...

Read more