Bears vs Bulls: Harshad Mehta scam to COVID-19—Top 7 biggest stock market crashes in India’s history | Stock Market News

Stock market crash: The Indian stock market faces the heat of domestic and global triggers after extending its losing streak for the third consecutive week and reaching its lowest levels since June 2024. Domestic benchmarks, Sensex and Nifty 50, logged their worst day in around five months, with the NSE benchmark posting its longest monthly losing streak in the last 29 years (since 1996), dragged by foreign capital outflows amid US tariff fears.

However, selling pressure from external triggers is nothing new for the Indian stock market. History tells us that the frontline indices have faced far worse crashes in the last 30 years. From enduring the brunt of massive banking scams to global economic slowdowns, Sensex and Nifty 50 have witnessed corrections, recoveries, and stellar highs, driven by the resilience of domestic investors amid India’s strong macroeconomic fundamentals. 

Also Read: Stock market crash: Nifty logs longest monthly losing streak in 29 years; What should be your trading strategy?

According to D-Street analysts, India’s long-term growth story has supported the stock market sentiment. Corrections and breathers are most common after logging record highs. The BSE benchmark is down 14.86 per cent from its peak of 85,978.25 on September 27, not too long ago. Coming to historical data, let’s take a look at the top seven biggest stock market crashes in India’s history:

Top 7 biggest stock market crashes in India’s financial market history

1.Harshad Mehta Scam (1992)

The stock market crash was triggered by the Harshad Mehta securities scam when the stockbroker manipulated stock prices using fraudulent funds. The Sensex shed 56 per cent from its last peak, falling from 4,467 in April 1992 to 1,980 by April 1993. The crash took nearly two years to stabilise. 
 

2.Asian Financial Crisis (1997)

The market crash was caused by regional currency collapses, which gripped much of East and Southeast Asia during the late 1990s. In December 1997, the Sensex barometer plunged over 28 per cent from 4,600 to 3,300. It took one year for the stock market to recover and log new highs.

Also Read: Nifty 50, Sensex suffer biggest intraday drop of 2025; IT stocks hit hard—10 key highlights
 

3.Dot-com Bubble Burst (2000)
The collapse of the tech bubble caused the stock market crash in 2000, before the turn of the century. The Sensex slumped from 5,937 in February 2000 to 3,404 in October 2001, shedding 43 per cent. The stock market recovered gradually after investors shifted focus from tech to other sectors.
 

4.Election Shock (2004)
The unexpected victory of the UPA coalition in 2004 caused panic among investors. Sensex dropped 15 per cent intraday on May 17, 2004, triggering a trading halt due to overselling in the market. However, the benchmark index recovered from the intraday election shock within the next 2-3 weeks.
 

5.Global Financial Crisis (2008)
Lehman Brothers’ collapse in the US and the subprime mortgage crisis triggered a global recession. The Sensex dropped over 60 per cent from its peak of 21,206 in January 2008 to 8,160 by October 2008. The government’s stimulus measures and global liquidity helped a rebound by 2009.

Also Read: Markets in freefall: Nifty 50, Sensex down 16% from peak as global trade tensions escalate
 

6.Global Slowdown (2015-2016)
China’s market crash, commodity price crash, and domestic non-performing assets (NPAs) caused the stock market crash. The Sensex shed 24 per cent, from 30,000 in January 2015 to 22,951 in February 2016. Despite the crash, the Sensex recovered within 12-14 months amid India’s economic resilience.

7.COVID-19 Crash (March 2020)
Worldwide lockdowns and economic uncertainty caused by the COVID-19 pandemic caused the stock market crash in March 2020. The Sensex lost 39 per cent, falling from 42,273 in January 2020 to 25,638 in March 2020. The government’s aggressive fiscal and monetary policies led to a V-shaped recovery by late 2020, despite the economy hitting technical recession.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts, consider individual risk tolerance, and conduct thorough research before making investment decisions, as market conditions can change rapidly, and individual circumstances may vary.