India, March 19 -- The sudden resignation of HDFC Bank chairman Atanu Chakraborty triggered a sharp market reaction on Thursday, wiping out more than Rs.1 lakh crore in investor wealth within hours and raising questions about governance at India's largest private lender.

Shares of the bank plunged nearly nine per cent in early trade, hitting a fresh 52-week low after the announcement late Wednesday. The stock opened at Rs.770 and dragged down broader indices, with HDFC Bank alone shaving hundreds of points off the benchmark Nifty 50.

The sell-off followed Chakraborty's abrupt exit after he cited ethical concerns over certain practices within the bank that he said conflicted with his personal values.

The stock has slightly recovered sin...