BLOG 57/2026 DATED 5th OCTOBER 2026
It was a morning of 17th May 2004, everything as usual, when I took my dealing seat on the equity desk. Not more than a few minutes after the stock market opened, the market started tumbling down like a pack of cards, and trading was halted after it hit the circuit limit. The stock market fall was unprecedented. Market reacted to the election results, when BJP could not get the majority to form the government. As a dealer, I saw a buying opportunity and started buying a few shares as they were available at a really low price. I was authorised to make purchases of shares below a price cap of selected stocks and within the defined quantity. Soon after my boss entered the dealing room. He had a different view of the market and was not pleased to see me in purchasing mood. What are you doing? Sir, great prices, let me buy in lots. No, stop it immediately. I complied with the orders, even cancelling some of the unexecuted orders. On that day Nifty fell by 193 points a fall of 12.24% in a single day. This was the second biggest fall in the history of Indian stock market, the worst being on 23rd March 2000 i.e by 12.98% (Covid).
Above is the real incident describing the panic and opportunity conflict in the stock market, specially when it is falling. When the stocks started falling down, the one who deals in equity market, either starts panicking or sees this as opportunity and make some solid purchases at low prices. Present fall in stock market is different from the example of 2004. That was a shock momentum crash while present is a slow fall of over 4000 points in nifty from 26400 to 22400 in a span of around 2 years. The moment market sees such fall or rise, the forecasters will appear from nowhere to either inject panic or greed in the market. When the market was trading at 26000+, brokers started seeing the levels of 40,000 for Nifty. Now the same set of brokers will see the Nifty at 18000. In fact, no forecast can be denied or accepted. An investor remains invested and get smart profits form the share market. It must be noted that I am not referring to day/short/derivative trades. I am speaking about hardcore cash investors. Neither Panic nor aggression works in the stock market, but consistent investment with patience at the time of corrections/crash, yields better results. To carry out the point, I will present 2 set of data. One, share market in 2000 vis a vis 2026.
Stock market return since 2000:
| Date | Nifty |
| 31/12/2000 | 1264 |
| 01/10/2026 | 22422 |
This gives a handsome return of 11.60% p.a compounded annually for a period of around 26 years. This is despite the recent bear trend in the market. Those who stay invested even passively enjoyed this return. Much more than a return from FD which is around 7%.
Major crashes in stock market:
Another set of data is the reverse of this data as I picked the worst crash in the Indian stock market since 1990 and their recovery time.
| Period | Crash | Reason | Recovery time |
| 1992 (Apr/May) | 38% | Harshad Mehta scam | 20 months |
| 2001(March & Sept) | 38% | Ketan Parekh scam/global .com | 28 months |
| 2008 (Jan, June, Sept, Oct) | 52% | US subprime crisis | 58 months |
| 2020(March) | 32% | Covid outbreak | 11 months |
Out of many crashes and corrections, I picked the top four as above. These were the worst periods for Indian equity markets and the worst was 2008 US subprime crisis. Entire world’s financial markets were shaken. India by and large remained resilient on macro factors but equity market got the burnt. (Refer blog Share Market in India – Scary falls at sillypoint, link in bottom)
With every crash we have a recovery time. It took its time, consolidated and moved ahead to achieve a return of 11.60% p.a for the period of 26 years as shown in the first data. The longest recovery time was 2008 crash as it took around 5 years and it was only by 2013 that Nifty/ Sensex touched the levels of 2008.
Present market situation:
Post covid also stock market took its time and since 2021, it started its ascending curve and touched 26178 in September 2024. After coming down to 22124 in Feb 2025, it peaked at 26328 in January 2026. It was looking for another strong jump. Then came the fall and now it has fallen down to 22400+, mainly due to the pressure on external trades, Oil supply disruption, tariffs, FII outflow etc. Nifty has witnessed a zigzag between 22000 to 26000 between 2024 to 2026. Should we call it a crash? Not really, in fact so far it is a correction against the sharp increase post covid. In 2020 the Nifty stands around 9000 post covid debacle. Since then, it has gained around 2.8 times in a span of 6 years. Such remarkable gains normally see sharp corrections and we are witnessing the same.
What if it continues?
This is a valid question that every investor must keep in mind. The answer is to keep us free from greed and panic. It happens so often that we sell the stock at a low price out of fear. We must try to avoid this process where we tend to sell at lower prices to cut losses.
To avoid this, we can take the following steps:
- Stick to your SIPs as SIP enables the investor to get units at low prices. This will average out the cost and when market recovers, it will give better returns.
- If retail investors skip their SIPs or come out of it, the market will further come down. Hence continue your SIPs.
- If you invest directly in stocks, then pick only quality stocks. Quality stocks means
- Avoid penny stocks. Do not get attracted by the low-price share and stuck your money.
- Do not fall prey to unprofessional advises.
- Keep some cash for personal emergencies as you need not sell your stocks in unfavourable market.
- Invest in parts viz 20% of your target investment in a company and then keep adding on further falls.
- Keep booking profits on every rise.
Market corrections or even crash is not a new thing. It requires sensible decision making and patience to generate decent returns even in a falling market. Stay cool, stay invested, book profits.
“Be fearful when others are greedy and greedy when others are fearful.” – Warren Buffett
Readers can also refer to blog at sillypoint: Share Market in India- Scary falls – At Silly Point
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