Harshad Mehta scam, COVID to Black Monday: Top 5 biggest stock market crashes in India’s history

Indian stock market benchmark indices, Sensex and Nifty 50, crashed on Monday, tracking a sharp slump in global markets on fears over recession in the US due to the impact of an escalating global trade war triggered by US President Donald Trump’s reciprocal tariffs.

The Sensex crashed nearly 4,000 points, while the Nifty 50 dropped below 21,750 in early deals on April 7. The benchmark Nifty 50 headed towards a one-year low. The Midcap and Smallcap indices plunged up to 10%.

On Monday, the Sensex opened 3,914.75 points, or 5.19%, lower at 71,449.94, while the Nifty 50 began trading with a dip of 1,146.05 points, or 5.00%, at 21,758.40, witnessing its one of the biggest single-day fall in the history.

Investors lost nearly ₹16 lakh crore within minutes as the overall market capitalisation of the BSE-listed firms dropped to ₹387 lakh crore from over ₹403 lakh crore in the previous session.

India VIX spiked 56.50% to 21.53, suggesting investors are bracing for high volatility amid global trade war fears.

The global stock market crash on April 7 evokes memories of ‘Black Monday’ on October 19, 1987, widely regarded as the first modern global financial crisis.

Here are the some of the single-day top 5 biggest stock market crashes in India’s financial market history:

1. Harshad Mehta Scam Crash (1992)

The first major shock to India’s stock market came in 1992, when the Harshad Mehta scam was exposed. When the scam — estimated at over ₹4,000 crore — came to light, the Sensex crashed.

On April 28, 1992, the Indian stock market recorded its biggest single-day fall at the time, with the Sensex plunging 570 points, or 12.7%. This scandal led to sweeping reforms in the Indian financial system, including the strengthening of SEBI's regulatory powers.

2. Ketan Parekh Scam Crash (2001)

In 2001, the stock market was rocked by another manipulation scandal involving broker Ketan Parekh. When the scam was uncovered, and with the dot-com bust still fresh, markets panicked. On March 2, 2001, the Sensex dropped 176 points, or 4.13%. This period also coincided with the Gujarat earthquake and weak global cues, worsening the sell-off.

3. Election Shock Crash (2004)

In a dramatic political twist, the 2004 General Election results shocked the Indian stock markets. The UPA’s unexpected victory over the NDA raised concerns about the continuity of economic reforms.

On May 17, 2004, the Sensex recorded one of its most severe single-day crashes, falling 11.1%. The stock market had to be halted twice during the day as panic selling intensified. Eventually, stability returned after the UPA signaled its commitment to reforms.

4. Global Financial Crisis Crash (2008)

The 2008 crash was part of a global financial meltdown following the collapse of Lehman Brothers in the US. On January 21, 2008, the Sensex plunged 1,408 points, or 7.4%, due to fears of a global recession and mass sell-offs by foreign institutional investors (FIIs).

Over the following months, the Sensex fell nearly 60% from its peak, marking one of the worst bear phases in Indian market history.

5. COVID-19 Pandemic Crash (2020)

The COVID-19 outbreak triggered the most severe single-day crash in Indian stock market history. On March 23, 2020, the Sensex crashed 3,935 points, or 13.2%, as India announced a nationwide lockdown.

Fears of an economic standstill and global recession led to unprecedented panic selling. However, with swift fiscal and monetary support, the market rebounded strongly in the following months.

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