Sunday Stock Market Flashback: Uncertainty always brings doubts, and doubts bring fear! This saying holds true for the Indian stock market as well. It is not necessary that the stock market always leads to doomsday, but history has proven that the Indian stock market has shocked the roots of investors, causing some to never trust the charts and candles again. Millions of investors enter the stock market worldwide each year with the anticipation of making a profit and dreaming of becoming rich. After the anticipations, speculations and hope, only a handful of investors make money in the stock market. It is said that the stock market can make you a king or turn you to rags in no time if you don’t have a strategy to keep up. Today, in a quick Sunday flashback story, we present the proof of the biggest stock market crashes.
Sunday Stock Market Flashback–
Corona Crisis- COVID Panic, March 2020–
The unforgettable period, the world remembers the COVID-19 crisis. While it hit all the sectors across the world, the aftermath of the stock market was not pretty either. All the market enthusiasts and investors in India remember the nightmare of Indian stock market crash during the COVID in March 2020. The market saw a decline, investors lost Rs 13.88 trillion in the black hole of the market, shaking the investor community and making them poor.
On 23 March, the market declined by 13%, equal to 3,935 points, and Nifty fell by 13% or 1,135 points. Adding more surprise to it, the VIX (Volatility Index) increased to 6.64%. VIX is the measurement of fear and uncertainty in the market. Out of 2,401 stocks that were regularly traded on the Bombay Stock Exchange (BSE), 2,036 stocks went down and only 233 went up.
The reason behind the fall of the Indian stock market was the declaration of a nationwide lock-down by the Government of India from 23 March. The fear of a stagnant economy gripped the market, and all the major large-cap stocks dropped over 15% that day.
Demonetisation And The Losing Reports Of Donald Trump, November 2016-
To crack down on the fake currency racket and black money menace, the Indian government in November 2016 introduced demonetization. The government banned the old 500 and 1,000 denomination currency notes and introduced new currency of 500 and 2,000 rupees. The same year, ahead of the US presidential elections, Donald Trump took an early lead, increasing his chances of becoming the president of the US. This, together, prompted Indian market investors to hit the sell button in panic on 9 November 2016.
One thing led to another, causing the Indian stock market to witness its worst-ever crash. The Sensex took a deep dive of 1,688 points, which was a 6.12% fall, while Nifty crashed by more than 540 points, or 6.33%.
Donald Trump’s losing report from the US presidential election added to it. As the market reports suggested that it favored Hillary Clinton, these two incidents together triggered the Indian stock market, giving a big blow to investor sentiment, making them pull away most of their money.
- The shares that fell over 5.50 points each were
- Adani Ports, M&M,
- Bharti Airtel,
- ONGC,
- Bajaj Auto,
- ICICI Bank,
- Hero MotoCorp,
- Cipla,
- Sun Pharma,
- HDFC Ltd.
- Most real estate trumbled to over 15% were
- DLF,
- Godrej Properties,
- Sobha Developers,
- Unitech,
- Indiabulls Real Estate
- HDIL
Globally, crude oil prices dropped to below 45 levels after shedding off 2.65%.
Scam Of The Season- Harshad Mehta Scam, April 1992
The year 1992 brought the revelation of the scam of the season by Harshad Mehta, bringing a big crash in the Indian stock market. Sensex dropped by 570 points, making it a 12.77% fall at that time. Hurting investor sentiment, it urged them to wipe off Rs 35 billion from the market. The scam comprised a 500 crore fraud orchestrated by Harshad Mehta, famously known as the ‘Bull of the Stock Market.’ He was the most famous broker of his time, associated with the who’s who of the nation. This scam made his clients poor, and on top of that, many Indian investors lost their life savings in this crash.
The market lost 40% of its combined value, and the aftereffects were long-lasting. Middle-class investors lost their faith in the stock market and trading. This urged the Government of India to amend laws and form new committees for damage control.
We learn from the mistakes of others, but the stock market is so uncertain. Someone’s mistaken investment could possibly make them a richer lad, whereas some hopeful investments can eat up their whole life savings. Before entering the stock market, always stay cautious and take expert opinions on every buy and sell you make. Remember, never enter the stock market to be a one-day billionaire or rich. Make strategies so you can come out creating wealth for the long term. Many long-term investments with a clear intent in the stock market will welcome you with profitable returns.
(Also Read: Gold Price Today: Good News For Buyers! Yellow Metal Continues To Decline, Silver Down; Check Rates In Your City)
