The Indian stock market has shown strong resilience, bouncing back after every major downturn in the past 30 years. Here’s a look at key crashes and recoveries:
1. 1992 Harshad Mehta Scam – The Sensex crashed over 50% between April 1992 and April 1993 after the scam was exposed. However, by 1994, the market had recovered, driven by economic reforms and foreign investments.
2. 1997 Asian Financial Crisis – The Sensex dropped around 40% between 1997 and 1998. It rebounded by 1999, aided by IT sector growth and strong GDP performance.
3. 2000-2002 Dot-com Crash & Ketan Parekh Scam – The Sensex fell over 55% from its 2000 peak, bottoming out in 2001-02. The market recovered by 2003, led by strong corporate earnings and FII inflows.
4. 2008 Global Financial Crisis – The Sensex crashed over 60%, from 21,000 in January 2008 to 8,000 by October 2008. Government stimulus and global recovery helped it reclaim 21,000 by 2010.
5. 2020 COVID-19 Crash – The Sensex fell 38% in March 2020 but rebounded sharply, reaching new highs by November 2020, supported by low interest rates and strong corporate earnings.
6. 2022 Global Inflation & Rate Hikes – The Sensex dropped nearly 15% but recovered by early 2023, driven by India’s economic resilience and strong domestic investment.
Each crisis saw temporary declines, but long-term investors benefited as the market consistently reached new highs, reflecting India's economic strength and growing investor confidence.
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