Daijiworld Media Network - Mumbai
Mumbai, Mar 1: As Indian stock markets witnessed a sharp downturn this week, market experts emphasized that past corrections—such as those seen during the Lehman Brothers crash, the Taper Tantrum, demonetization, or the COVID-19 crisis—have historically proven to be strong buying opportunities in hindsight.
According to Krishna Appala, Senior Analyst at Capitalmind Research, while the current market correction may seem painful, historical trends suggest that long-term investors could see substantial gains in the future. “Over the past 30 years, markets have fallen by more than 20 percent in multiple instances, yet have ended positive in 22 of those 30 years,” he said, highlighting the resilience of the equity markets.
The benchmark indices declined over 3 percent this week amid widespread selling pressure, driven by fears of a deepening trade war and concerns over a slowing U.S. economy. Investors reacted sharply to news that the U.S. is set to impose a 25 percent tariff on imports from Canada and Mexico, along with a 20 percent tariff on Chinese goods. This development triggered volatility across global markets, contributing to a nearly 2 percent drop in key Indian indices on Friday.
Appala pointed out that sharp declines are often followed by equally strong recoveries, reinforcing the importance of maintaining a disciplined, long-term approach. “Market discipline matters in tough times just as much as in strong ones. Achieving long-term returns isn’t a straight path—it includes periods of steep drawdowns and sharp recoveries,” he added.
The Indian markets saw significant fluctuations throughout the week. On Monday (Feb 24), the Sensex plunged by 857 points, slipping below the 74,000 mark, while the Nifty lost 242.55 points to settle at 22,553.35. A slight rebound on Tuesday (Feb 25) saw the Sensex gain 147 points, though the Nifty extended its losing streak for the sixth consecutive session.
Investors remained cautious ahead of the monthly derivatives expiry, leading to a mixed market performance on Thursday. While financial and metal stocks saw some gains, the auto and capital goods sectors faced persistent pressure. The RBI’s move to lower risk weights on bank financing for NBFCs and microfinance loans provided some support to stocks like Shriram Finance, Bajaj Finserv, and Bajaj Finance.
However, Friday saw renewed selling pressure, leading to another steep decline in the domestic benchmark indices. The Nifty closed at 22,124.70, down 1.86 percent, while the Sensex dropped 1.90 percent to settle at 73,198.1.
Despite the turbulence, analysts believe that investors who stay committed to their portfolios and view downturns as opportunities rather than setbacks may ultimately benefit from the market’s long-term growth trajectory.