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The Indian stock market has always been a dynamic arena, reflecting both the country’s economic pulse and the global financial ecosystem. From corporate frauds to international crises, India’s equity markets have weathered numerous storms. This article takes a closer look at some of the most dramatic crashes in India’s stock market history, exploring the causes, impacts, and recoveries that followed.The Harshad Mehta Scam (1992) — A Tale of Deceit and a Market FreefallThe early '90s were marked by one of India’s most infamous financial scandals. Harshad Mehta, a stockbroker with a seemingly golden touch, manipulated the market by diverting funds from banks using fraudulent means. This artificial inflation of stock prices led to an unsustainable bubble. When the scam unraveled, the Sensex plummeted by 56% from 4,467 to 1,980 points between April 1992 and April 1993. The aftermath was devastating, with markets struggling to regain stability for nearly two years.The Dot-Com Bubble Burst (2000) — The Tech Mirage FadesThe global tech boom of the late '90s spilled over into India, fueling speculative investments in IT stocks. However, as the bubble burst, the Sensex tumbled from 5,937 in February 2000 to 3,404 by October 2001—a 43% drop. The correction was harsh, but it redirected investor focus beyond tech, laying the groundwork for future market resilience.The Ketan Parekh Scam (2001) — The Return of Market ManipulationA few years after Harshad Mehta’s debacle, the Indian markets faced another jolt—this time involving Ketan Parekh. Known as the “Big Bull of 2001,” Parekh manipulated select stocks, inflating their prices to unsustainable levels. When the scam came to light in March 2001, it triggered widespread panic. The Sensex dropped 4.13% in a single day, with the impact compounded by the recent Gujarat earthquake and global uncertainties.The Global Financial Crisis (2008) — A Global Tsunami Hits IndiaThe 2008 financial crisis was a wake-up call for economies worldwide. In India, the collapse of Lehman Brothers and the subprime mortgage crisis in the U.S. sent shockwaves across markets. The Sensex crashed over 60%, from 21,206 points in January to 8,160 by October. The Indian government’s stimulus packages and improved global liquidity eventually stabilized the market, but the scars of the crisis lingered.The Covid Crash (March 2020) — A Pandemic-Induced PanicThe outbreak of Covid-19 was not just a health crisis; it was a financial one too. The Sensex lost 39% of its value, plummeting from 42,273 in January to 25,638 in March 2020. The sudden lockdowns, disrupted supply chains, and economic uncertainty triggered a massive sell-off. However, swift fiscal and monetary responses led to a remarkable V-shaped recovery by the end of the year. The 2016 Demonetization ShockWhile not a traditional market crash, the 2016 demonetization policy had an immediate impact on stock markets. The sudden withdrawal of ₹500 and ₹1,000 currency notes led to cash shortages, disrupting economic activity. The Sensex dropped over 6% in the days following the announcement but recovered as the economy adjusted.India’s stock market has proven time and again that while it can be volatile, it is also resilient. Each crisis has been a lesson in risk management, regulatory reforms, and investor psychology. As we navigate the current global uncertainties, understanding the past can offer valuable insights for the future.

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