Share Market in India- Scary falls

BLOG 22/2026 DATED 31ST MARCH 2026

Share market has been always fascinating for investors who are ready to take risk. Some use this market as sheer gambling tool, trading on margins, day trades, arbitrage etc while other use is as Investors to make long term appreciation. This market has been very friendly to these investors and most of them made money with handsome double-digit returns. However, those treating this market as a gamble to generate quick returns remain discouraged more often than not except few who could generate exorbitant returns.

The most difficult phase in this market is the sharp falls and most of the people lose their money in these phases. Let us now analyse these scary falls on a month-to-month basis and their recovery time in the Indian equity market from the period starting 1990 till date. We take Nifty 50 as the benchmark index for our assessment. We have taken market falls of above 10% in a single month.

April & May 1992:

This was the time of Harshad Mehta scam, nifty fell by 12.37% in April and then a disastrous 25.27% in May 1992. Indian markets were just opening up, regulations were just building up and no one was prepared for this mayhem. March Nifty index was 1261.60 which came down to 826.16 by May end. Entire 1992 remained extremely volatile. It took a long 20 months and it was only in Jan 1994 when market touched the levels of 1200+.

The fall	Recovery time
37.64%	20 months

However, market kept coming down below 1200 levels and it was only in 2003 i.e after a period of 11 years that market settled above 1200 level once for all.

Nov 1995:

The Nov 1995 fall of 12.77% was attributed to fall in the value of currency and also rising interest rates when banks started offering even 13% on deposits. Share market crashed in Oct/Nov from the 1011.90 in Sept end to 862.10 in Nov end, a crash to 14.11% in two months. It regained these levels of 1000+ in April 1996 by a gap of 5 months. Year 1995 remained scary with over 23% fall in nifty index during the year.

The fall	Recovery time
14.11%	5 months

Jan 1998:

In Jan 1998 Nifty index fell by 10.74%. It  was attributed to a larger south Asian currency crisis and negative FII (Foreign Institutional Investors) outflow. The scary fall though recovered immediately. Dec 1997 level of 1079.40 was regained in March 1998 with a 2 months lag.

The fall	Recovery time
10.74%	2 months

June 1998:

1998 remained a nightmare when after a short recovery market again fell flat by 11.42% in June after falling over 8% in May. The fall continued up to Oct 1998 and index fall down to 817.75 level by Nov 1998 from 1159 level in April 1998. The April 98 index was regained by June 1999 only, after a gap of 14 months.

The fall	Recovery time
19.72%	14 months

March & Sept 2001:

March 2001 saw a sharp decline of 15.04% and it was due to Ketan Parekh scam as well as global dot com bubble burst. In sept 2001, once again it dived down with a fall of 13.27%. The gloom resulted in a total fall of 38.09%. Nifty came down from 1371.70 in Jan 2001 to 913.85 in Sept 2001. Year 2001 saw a total fall of 16.19%. Markets could regain these levels only in August 2003.

The fall	Recovery time
38.09%	28 months

May 2004:

It was an election result that caused a 17.04% decline in nifty index in May 2004. Polls gave a fragmented mandate favouring Congress over BJP. Congress formed the Govt but only with support of other regional parties. Nifty index of 1796.10 in April came down to 1483.60 in May 2004. These levels were retouched Oct 2004.

The fall	Recovery time
17.04%	6 months

May 2006:

May 2006 resulted in a fall of 13.68% due to heavy FII sell-off triggered on account of increased rate of interest in US markets. Markets were 3557 in April 2006 which came down to 3071 in May. The index regained April levels in Sept 2006.

The fall	Recovery time
13.68%	5 months

Jan, June, Sept & Oct 2008:

The world saw a crisis named US Subprime crisis and world markets went tumbling down. Indian economy and markets resisted to a very large extent, still nifty index slipped by 16.31%, 17.03%,10.06% and then a kill at 26.41% in Jan, June, Sept and Oct 2008 respectively. This was probably the deadliest year in the history of share market in India when the nifty index was burnt by 51.80% in 2008. Index came down from its peak of 6138 points in Dec 2007 to 2885.60 points in Oct 2008. Market could see the 2007 levels only in Oct 2013.

The fall	Recovery time
51.80%	58 months

During this recovery period also, index saw a fall of 10.25% in January 2011. Still market value was more than doubled in this recovery period.

March 2020:

Hare came Covid, tumbling down whatever came its way and Indian equity markets were no exception. Nifty doomed down by 23.25% in March 2020 i.e. from 11202 in Feb 2020 to 8597.80 in March 2020. The peak level of 12168 in Dec 2019 was regained in Nov 2020 i.e. after a span of 11 months.

The fall	Recovery time
31.31%	11 months

March 2026:

Feb 28, 2026, US-Israel attacked Iran and killed their Leader Ali Khamenei. This started a full-fledged war and its catastrophic economic results for the entire world as supply of Oil, Petroleum and Gas is hampered. Nifty Index saw a crash of 11.43% during March. The crisis is still on and we keep our figures crossed as to where this crisis will take us?

Conclusion:

The biggest of crash i.e., due to Subprime crisis, Ketan Parekh or Harshad Mehta, took years for the market to recover. Other crisis viz covid, elections etc took less than a year to recover. One thing was common with all crash that markets could recover after some time. This crash due to US-Israel Vs Iran war will also take its own recovery time. This time percentage wise it is only 11.43% so far but value wise index is seeing its biggest fall i.e., by around 3000 points. If the fall remain to the extent of 20%, it may take up to a year to recover, however a bigger fall may take more than that in recovery. This is the time when PENIC and FEAR sets in. HOLD it and WAIT. DO NOT RESORT TO PENIC SELLING. Book profits on upwards.

Author is a CFA (ICFAI) & ex banker, educator

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