Recently, on April 7, the Sensex and Nifty 50 experienced a significant drop, mirroring global market anxieties about a potential US recession fueled by escalating trade tensions. The Sensex plummeted nearly 4,000 points, the Nifty 50 dipped below 21,750, and investor wealth diminished by approximately ₹16 lakh crore in minutes. This volatility, reflected in a surge in the India VIX, has drawn comparisons to the “Black Monday” crash of 1987.
Here are five of the most impactful stock market crashes in India’s history:
1. The exposure of a ₹4,000 crore scam led to a 12.7% (570 point) drop in the Sensex on April 28, 1992. This prompted significant financial system reforms.
2. Coupled with the dot-com bust and the Gujarat earthquake, the Ketan Parekh scandal caused the Sensex to fall 3.7% (176 points) on March 2, 2001.
3. The unexpected UPA victory in the 2004 elections triggered concerns about economic reform continuity, resulting in an 11.1% (842 point) Sensex crash on May 17, 2004.
4. The collapse of Lehman Brothers and fears of a global recession led to a 7.4% (1,408 point) Sensex decline on January 21, 2008. The market continued to fall nearly 60% over subsequent months.
5. The announcement of a nationwide lockdown on March 23, 2020, caused the Sensex to crash 13.2% (3,935 points), marking the most severe single-day fall in Indian market history.