Hundreds of investors rioted in the commercial district of Dhaka, Bangladesh on Sunday after the local stock market suffered its sharpest one-day decline in its history.

The index plunged 552 points, or 6.72 percent, leading enraged Bangladeshi investors to toss bricks at police, march down streets screaming slogans and conducting a sit-down protest. Apparently, the market drop was precipitated by a recent interest rate hike of 50 basis points to 6.00 percent by the central bank, The Bangladesh Bank, to cool down inflation.

In addition, local regulators have taken measures to limit the money supply on fears that equities have become overvalued. As a result, large institutions sold out of the market, prompting panic among small retail investors.

The Dhaka Stock Exchange recently ascended to an all-time high on December 5, after surging 80 percent year-to-date. Strong price appreciation had attracted hundreds of thousands of small investors into the market, away from lower returns in bank deposits.

According to Agence-France Presse, police chief Tofazzal Hossain said the protesters chanted slogans against the government and the regulators, and marched through the busy roads in the Motijheel Commercial area, halting traffic. They also staged a sit-in at the SEC building.

Protesters have claimed that the government and regulators have manipulated the market, including engineering a series of lesser corrections during the rally. In fact, a prior market plunge, on December 8, the market also nose-dived, also ignited protests in Dhaka and other towns.

The turmoil and volatility represent a stark reminder of the high risks associated with the emerging and frontier markets.