Top 10 Biggest Stock Market Crashes in India – What’s the Cause?

Top 10 Biggest Stock Market Crashes in India – What’s the Cause?

Top 10 Biggest Stock Market Crashes in India – What’s the Cause? The Stock Market is an exceptionally unstable and unpredictable place. From the highs to the lows, there seems to be no rhyme or reason behind when it takes a plunge. But that doesn’t mean that we shouldn’t be vigilant of its movements at all times. Because when one does not keep an eye on it, it can strike us unawares and leave us scrambling for whatever value we still have left in our account. Investing in stocks has its own risks too, which is why you should only do so if you are ready to lose some of your money. Even then, there are certain things that you can do to help reduce the chances of losing as much as possible. Here we look at what factors contributed to these 10 Biggest Stock Market Crashes in India and how you can avoid getting trapped by them again.

Introduction to Stock Market Crash 101

Every financial market goes through highs and lows, with the lows usually resulting in a ‘crash’. This is more common in the stock market and commodity market, where both assets fluctuate significantly over time. But what is the story behind it? Why does it happen and what does it mean for investors? We will try to find answers to all of these questions in this article. The first thing to understand is what a crash actually is. A crash is a sudden and drastic drop in the value of an asset or an asset class. This may be due to positive or negative reasons, and is often attributed to a ‘bear market’ or an ‘investment environment’ that is ‘not positive’.

What is a Stock Market Crash?

A stock market crash is the sudden and dramatic decline of stock prices when financial investors sell their shares in large numbers. It is often followed by a bear market where investors panic and sell off their shares for less than the purchase price, resulting in a loss for many. There are many factors that can contribute to a stock market crash; some are internal to the market, while others are from the outside world. Some of the factors that could contribute to a stock market crash include an economic crisis, a war, the outbreak of an epidemic, or a major natural disaster, among others.

Why Do We Have Stock Market Crashes?

There are many possible reasons behind stock market crashes. One of the most common reasons is that the value of a certain asset falls too low for investors to be interested in buying it back at its original price. This can happen because a lot of people are selling their shares, resulting in a drop in demand. The same can happen if a lot of people are buying shares, resulting in an increase in demand and a price rise. Another reason behind a stock market crash is the discovery of fraud in a certain company’s operations. When the fraud is discovered and the public is made aware of it, a lot of people sell their shares, causing the value of the company to plummet and leading to a market crash.

10 Biggest Stock Market Crashes in India

Now that we know what a stock market crash is and why we have them, let’s take a closer look at some of the biggest crashes that the Indian stock market has seen. We will be looking at each of these crashes from the perspective of what contributed to them, highlighting what you can learn from them. – The Mumbai Stock Exchange Crash of February 2014 – This crash was due to a rise in volatility on the Mumbai Stock Exchange, leading investors to sell off their stocks. This was followed by a low in the stock market and contributed to the fall of 28% in the share prices of many companies. – The Sensex Crash of September 2018 – This is the most recent stock market crash that took place in India, and it is estimated to have caused the loss of Rs 3.52 lakh crore in the value of shares of Indian companies. This crash came as a result of the new government’s decision to scrap the Rs 500 and Rs 1,000 notes overnight, resulting in a high level of uncertainty among investors. – The Nifty Crash of November 2001 – This was one of the biggest crashes in the Indian stock market, causing the loss of Rs 1.87 lakh crore in the value of shares. This was due to a sudden increase in volatility in the market, causing a high level of uncertainty among investors. – The Bombay Stock Exchange Crash of February 2002 – This crash was due to the low level of participation in the BSE and a high level of volatility. This caused a crash of 28.2% in share prices and a loss of Rs 63,000 crore. – The NSE Crash of February 2002 – Another crash occurred on the National Stock Exchange due to a low level of participation and a high level of volatility. This caused a crash of 5.24% in share prices and a loss of Rs 25,000 crore. – The Sensex Crash of May 2002 – This was one of the biggest stock market crashes in the history of the Indian market. It caused a loss of Rs. 2.19 lakh crore in the value of shares, and this was due to a high level of volatility and a low level of participation. – The NSE Crash of June 2003 – Another crash occurred on the National Stock Exchange due to a low level of participation and a high level of volatility. This caused a crash of 5.42% in share prices and a loss of Rs. 25,000 crores. – The Bombay Stock Exchange Crash of March 2004 – This was one of the biggest stock market crashes in the history of the Indian market, causing a loss of Rs. 2.48 lakh crore in the value of shares. This was due to a high level of volatility and a low level of participation. – The BSE Crash of February 2007 – This was yet another crash in the Indian stock market, and it caused a loss of Rs. 1.36 lakh crore in the value of shares. This was due to a high level of volatility and a low level of participation.

How to Avoid Getting Trapped By Another Market Crash

There are a few things that you can do to help you avoid getting trapped by another market crash. While investing in stocks is a gamble, it is important to not be reckless with your money. If you lose a few percentage points in your account in a crash like this, don’t worry, it happens to everyone at some point in time. However, you can help reduce the risk of losing your entire investment by following these tips: – Know when to sell your stocks: When the market is crashing, it is tempting to just sit back and wait for it to right itself. However, you should never do this because it is just asking for disaster to strike. While it may not happen immediately, it is important to sell off your stocks when the price is low enough for you to recover your loss and move on. – Don’t keep all your eggs in one basket: The danger of investing in the stock market is that you can’t predict when one company’s low will cause the market to plunge. This means that you should diversify your portfolio by investing in a wide range of stocks. – Keep an eye on the news: It is important to keep an eye on the news to see what is happening in the world, and in the stock market, to see if anything is contributing to a crash. This will help you keep an eye on the market and decide when to sell off your stocks.

Conclusion

Investing in stocks has its own risks too, which is why you should only do so if you are ready to lose some of your money. Even then, there are certain things that you can do to help reduce the chances of losing as much as possible. In this article, we have discussed what factors contributed to these 10 Biggest Stock Market Crashes in India and how you can avoid getting trapped by them again.

Also, Read – 10 Best youtube channels for stock market beginners

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