Winning Bizness Economic Desk

Mumbai.

• Sensex plunged 16% on May 17, 2004, but recovered in 2.5 months
• During COVID-19 panic, market fell 13% on March 23, 2020; recovery in 8 months
• Harshad Mehta scam crash in April 1992 saw a 13% fall; took 16 months to recover
• Global financial crisis in October 2008 led to 11% drop; full recovery in 22 months
• January 2008 crash triggered a two-day fall of 12%; recovery took nearly 2.5 years

2004: Market Rebounds Within 2.5 Months After Biggest Ever Single-Day Fall

On May 17, 2004, the Sensex registered its steepest single-day fall of 16 percent following the unexpected defeat of the Atal Bihari Vajpayee-led NDA in the general elections. The political uncertainty triggered panic selling, dragging the market sharply down from around the 5000 level. However, the market rebounded strongly and regained the 5000 mark by July 2004, marking a full recovery within just two and a half months. This rally laid the foundation for a sustained bull run in the years that followed.

2020: COVID-Induced Crash Reversed in Just Eight Months

Amid fears of the coronavirus pandemic, the Sensex nosedived over 13 percent on March 23, 2020, falling from near 41,000 to 25,900. The sharp fall came after the Indian government announced a nationwide lockdown starting March 25. Despite the unprecedented disruption, the market staged a V-shaped recovery, regaining the 40,000 mark by November 2020, just eight months after the crash.

1992: Harshad Mehta Scam Crash Took 16 Months to Recover

The fallout of the Harshad Mehta securities scam led to a sharp 12.77 percent drop in the Sensex on April 28, 1992. The market, which was around the 4400 level in April, plunged to 3900 as investor confidence was shattered. The slide continued over the following year, but by August 16, 1994, the Sensex had regained and surpassed its pre-crash levels, marking a recovery period of around 16 months.

2008: Lehman Collapse Sparks 11% Fall, Recovery Takes Nearly 2 Years

On October 24, 2008, the Sensex slumped 10.95 percent as the global financial crisis deepened following the collapse of Lehman Brothers. The index fell to 8,566, having already dropped from a high of nearly 18,000 earlier in the year. Although signs of a turnaround emerged that very week, it took until July 2010—about 22 months—for the market to reclaim its earlier peak.

2008-2010: Early 2008 Crash Took Over 2 Years for Full Recovery

Before the Lehman crisis hit full force, the Sensex had already been showing volatility. On January 21 and 22, 2008, it fell 7 percent and 5 percent respectively, dragging it down from above 20,000 to 15,300. Further declines continued until October 2008, when it hit a low of 7600. A prolonged recovery began thereafter, and it wasn’t until September 27, 2010—nearly two and a half years later—that the market climbed back to its previous high.