History of Stock Market Crashes In India

Part 2: The History of Stock Market Crashes

You often end up hearing from your friends and family, “Stock Market is a risky attempt, Beware!” Yes, it is something to be beware of, but not with all these fed fears. That’s where the real insight about the stock market can help you out. Know about the history, the pattern of the stock market crash and the reasons for the crash. This can guide you in several ways and help you to build a wall of security for your future investments. You will read some of the prominent stock market crashes from history and the necessary precautions needed to tackle them in future in this article. Also, get to know why you shouldn’t worry about the crashes and learn the secret behind every stock crash and rise.

Major Stock Drops in 21^st century

2020

The contemporary burst of COVID-19 that ended in a pandemic and lock downs throughout the globe led to a tremendous market crash in global and Indian markets. From the day the World Health Organization (WHO) announced the virus as a pandemic, the Sensex descended from 42,273 points to 28,288 points in a week. This corresponded with the Yes Bank emergency generating the active BFSI division to drop crucial points too.

The display of the Union Budget on 1st February 2020 joined with the coronavirus panic drove the SENSEX to fall by 2%. Following, WHO listed Coronavirus as a dormant pandemic on February 28th, 2020 which directed to both the Nifty and the Sensex dropping with the most unfortunate weekly decline since 2009.

This was additionally supported by the shares of Yes Bank dropping on March 6th due to poor loans and one of the poorest NPA in the country. One of the patrons of Yes Bank was also caught in fraud custody. The recession after Yes Bank linked with the consequences of Coronavirus in Europe and the US caused in the markets reaching 35,636 points

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On 12th March the Sensex dropped by 8.18% as a consequence of WHO reporting corona a pandemic. As the pandemic further extended and the number of plights in India worsened the stock Market fell 13.5% on March 23rd. Additionally, a countrywide lock-down of 21 days was declared by Prime Minister Narendra Modi beginning from midnight March 24th. The lock-down was an emergency to control the extent but it was the ultimate task the Indian economy needed in its attempts to make a rescue.

The period from 17th January 2020 to 27th March 2020 witnessed the SENSEX lose 12,129.75 points.

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2016

2015-16 was a difficult time for stock markets throughout the planet. In India, the Sensex advanced to fall. By February 2016 it had fallen almost 26% in just eleven months. This was essentially associated with Indian banks owning a lot of NPAs and overall global instability. By November 2016, there was wild traffic by people after the government split down on black money through the Demonetization drive heading to the Sensex falling by 6%. This held concurrent with declines in different Asian markets also.

2015

While the markets gained from the significant downturn in 2008, on August 24, 2015, Sensex dropped 1624 points. This was associated with concerns of a possible slowdown in the Chinese market. This was because of the devaluation of the Chinese Yuan a few weeks before the wreck prompting a decline in the rates of other currencies and big selling volumes of stocks. In the Indian markets, this was worsened by a poor monsoon period in India and insufficient earnings in the first part of the Fiscal.

2008

The financial crisis of 2008 unfavorably affected businesses, economies, and stock markets. On January 21, 2008, the Sensex fell by around 1408 points, troubling the investor capital. This day is related to Black Monday and critics credited the decline to a range of speculations like the shift in the global investor faith, extensive doubt that the economy of the USA might go into bankruptcy, drop in the business degrees in the US etc.

By the close of 2008, the Sensex had fallen from nearly 20,465 points to 9716 points. The Sensex eventually passed the 20,000-mark repeatedly in September 2010.

Why you Shouldn’t Worry Stock Market Crashes?

Stock crashes are some of the worst shocks that investors fear. Even, there is a news related to the pathetic end of the investors, due to the stock market crashes. If your fear such crashes, here are some reasons not to fear

A stock market crash is not the end, wait for the recover

The stock market history has proved that, as there are crashes, there are recoveries too. The stock crash is not forever. You can be patient and wait for the recovery of the stocks.

Crashes are short term

If you are a long term investor, don’t worry about the short term falls. Keep your trust in the guts and wait for long term success.

Stock Crashes doesn’t come in a line!

Often when you look to history, you might have seen that the biggest crashes don’t come in a line. There are year lapses in between. So, keep your guts high and start investing.

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