These are the biggest Indian stock market crashes since 2016
What's the story
The Indian stock market has seen some major crashes in the last decade, with Sensex and Nifty taking hits. These crashes were triggered by a mix of global uncertainties and domestic events like demonetization. The impact on India's financial landscape has been huge, but despite all this, Nifty 50 has given around 68% returns while Sensex has given returns of over 195% in the last 10 years. Let's take a look at the biggest stock market crashes during this period.
Market reaction
Crash post demonetization announcement
On November 9, 2016, the Indian stock market crashed after the government's surprise demonetization announcement. The Sensex plunged by 1,689 points (6.12%) to close at 26,902, while Nifty 50 dropped by a similar margin of 541 points or 6.33% to end at 8,002. The decline was further fueled by uncertainty from US presidential election results.
Global crisis
COVID-19 pandemic crash
The COVID-19 pandemic caused one of the worst market crashes in recent history due to its unprecedented speed and global scale. On March 23, 2020, the Sensex plunged by a staggering 3,935 points or 13.15%, while Nifty 50 tumbled by a similar margin of over 1,135 points or nearly 13%. Overall, from its peak in January to the bottom in March, the market lost nearly 38% of its value amid panic over nationwide lockdown and uncertainty about global economic outlook.
Systemic ripples
Adani Group rout
The Hindenburg Research report on Adani Group didn't cause a widespread market crash like COVID-19 but created significant systemic ripples. The conglomerate's listed companies lost over $100 billion in value within weeks, raising fears of contagion especially regarding banks' exposure to the group. This led to heightened volatility and largely sideways movement in broader indices including Nifty 50.
Election aftermath
Post-election result crash
Despite hitting record highs on strong exit poll optimism, the market witnessed its worst "non-pandemic" crash when actual election results indicated a tighter-than-expected contest in 2024. The benchmark indices Nifty 50 and Sensex fell by 5.93% and 5.74%, respectively, in a single session. This sharp sell-off triggered panic across sectors, wiping out nearly ₹31 lakh crore of investor wealth within hours.
Geopolitical tensions
US-Iran tensions
The latest major market disruption was caused by rising geopolitical tensions between the US and Iran, resulting in a sharp spike in crude oil prices. Today, Sensex plunged nearly 2,500 points or over 3% to hit an intraday low of 76,424 while Nifty dropped by over 750 points or 3% to fall to 23,697. The decline came after crude oil prices crossed $110/barrel mark, triggering heavy sell-offs in oil marketing companies and paint manufacturers sensitive to raw material costs.