Indian markets panic on US fears

The Indian stock markets fell to their 14-month low on Friday on concerns of growth of the US economy and taking a cue from the world markets that sank for an eighth straight session on Friday, wiping $2.5 trillion of investors worth.

During Friday's trade, the 30-index BSE Sensex initially tumbled 700 points, but recovered partially, and closed at 17,306, down 387 points or 2.19 per cent. The plunge for the fourth consecutive day wiped off Rs1.33 lakh crore of investors' money.

At the National Stock Exchange, the 50-stock Nifty index lost 120.55 points, or 2.26 per cent, at 5,211.25. The index had fallen 215 points during the day, but managed to close above an important support level of 5,200. Friday's market fall wiped off Rs 1,33,126 crore of investors' wealth.

NSE's volatility index, India VIX, a gauge of traders' perception of near-term risks in the market based on options prices, jumped 23.15 per cent to 24.90 on Friday.

Foreign institutional investors (FIIs) sold Indian shares worth Rs 1,788.96 crore on Friday, according to BSE data. On the other hand, domestic institutional investors bought shares to the tune of Rs 1,372.49 crore.

The market crash in India is on fears of an economic slowdown brought about by the high cost of money, following a hike in repo and reverse repo rates by the Reserve Bank of India (RBI) for the 11th time since March 2010, to tame high inflation.