NIFTY crash & spikes rollercoaster journey

Nifty 50 glorious journey from 1000 to 15000 is quite interesting. Nifty crash & spike journey was a rollercoaster. Let’s understand first what NIFTY means.

NIFTY is like our parliament where members chose are representatives of all the sections of society. Similarly NIFTY comprises 50 stocks that act as a representative of the Indian stock market.

“ Nifty 50 “ or “National Stock Exchange Fifty “is the benchmark index of the Indian stock market that represents the weighted average of 50 of the largest Indian companies listed on the National Stock Exchange.

Table of Contents

Details about NIFTY 50:

25 years old as established since 22 April 1996
Operated by NSE Indices Ltd a subsidiary of NSE Strategic Investment Corporation Limited
Represents 14 sectors of Indian economy as of 2021
Only those companies become part of NIFTY 50
- Those traded in NSE India
- Those have been traded at an average cost of 0.50% or less during the last 6 months
- The float adjusted market capitalization of the companies must be at least twice of the current smallest index constituent

Sectoral indices includes:
- NIFTY Auto
- NIFTY Bank
- NIFTY Financial Services/ Nifty Financial Services 25/50 Index
- NIFTY FMCG
- NIFTY IT
- NIFTY Media
- NIFTY Metal
- NIFTY Pharma
- NIFTY Private Bank
- NIFTY PSU Bank
- NIFTY Realty
- NIFTY CONSUMER DURABLES
- NIFTY OIL & GAS
- Nifty Healthcare Index

Evolution of NIFTY in these 25 years

The base value of the index has been set at 1000 during its inception with a base capital of Rs.2.06 trillion. NIFTY 50 journey from 1000 to 15000 was breathtaking
In last 25 years NIFTY has give return of 11.1% CAGR,
13 companies have completed 25 years of journey with NIFTY since its inception
- HDFC Bank
- RIL
- HDFC
- ITC
- HUL
- L&T
- SBI
- Tata Motors
- Dr Reddy’s lab
- Tata Steel
- Grasim
- Hero
- Hindalco
NIFTY when it started was at 1107, and in 2021 it had crossed 15000, up by 14 times
Reliance Industries has the highest weightage stock followed by HDFC bank but back in 1996 State Bank of India was the highest weightage stock followed by Tata Motors
Return on NIFTY has surpassed return on gold in these 25 years, thus considered attractive investment asset.

How many times in these 25 years has NIFTY Crashed?

Nifty Crash of 2004- NIFTY crashed by almost 12 % due to UPA 1 Election
Nifty Crash of 2006- NIFTY crashed by 248 points as on 18^th May
Nifty Crash of 2007- Stock Market crashed 5 times in 2007
- 2^nd April 2007- NIFTY fell by 187 points
- 1^st August 2007- NIFTY fell by 183 points
- 16^th August 2007- NIFTY fell by 178 points
- 18^th October 2007- NIFTY fell by 200 points
- 21^st November 2007- NIFTY fell by 217 points
- 17^th December 2007- NIFTY fell by 260 points
Nifty Crash of 2008-there were series of 7 Stock Market crashes
- 21^st January 2008- NIFTY fell by 497 points
- 22^nd January 2008- NIFTY fell by 304 points
- 11^th February 2008- NIFTY fell by 263 points
- 3^rd March 2008- NIFTY fell by 269 points
- 17^th March 2008- NIFTY fell by 242 points
- 24^th October 2008- NIFTY fell by 352 points
- 26^th November 2008- NIFTY fell by 100 points
NIFTY fell by points Crash of 2009- NIFTY crashed by 264 points on 6^th July 2009
Nifty Crash of 2015- NIFTY crashed twice by 198 points on 6^th January 2015, and by 246 points on 24^th August 2015
Nifty Crash of 2016-Nov 9^th 2016 NIFTY fell by 365 points
Nifty Crash of 2018-On 2^nd Feb 2018 NIFTY fell by 178 points
Nifty Crash of 2000-
- 28^th February 2000- NIFTY fell by 181 points
- 4^thMarch 2000- NIFTY fell by 105 points
- 9^th March 2000- NIFTY fell by 291 points
- 12^th March 2000- NIFTY fell by 531 points
- 16^th March 2000-23^rd March 2000- NIFTY fell by 391 points
Nifty Crash of 2021
- 26^th February 2021- NIFTY fell by 359 points
5^th April 2021- NIFTY fell by 200 points

So from above, we can clearly state that year 2000 has seen the highest fluctuations in these 25 years. The pandemic had slashed NIFTY by 531 points in a single day. That’s by far the highest dip ever in the history of NIFTY. Obviously, it was a direct result of COVID-19 a never heard before virus which is still taking a toll on the world. The spillover effects will be seen throughout 2021. Hope with vaccines introduced we would see the economy recovering at a faster pace and achieving financial stability.

Conclusion

NIFTY has evolved with a lot of changes from 1996 to 2021. Some of them were in the form of stock weights, including more sectors of the economy and lots more. NIFTY 50 journey from 1000 to 15000 was a rollercoaster. The changes were for sure for good. The surge in NIFTY is here to continue. The returns that it had delivered are unbeatable. Looking at the long run, NIFTY is here to stay and grow exponentially. It will keep evolving and multiplying the investments of people. This evolution has indeed contributed to the growth of our economy. It acted as a catalyst to help strengthen the economy and help India continue as a developing economy.