Recently, huge fluctuations have been seen in the Indian stock markets. Due to the escalating war between Iran and Israel-America, there was a huge decline in the Nifty index and it fell by almost 8 percent in a single week. However, such crises are nothing new for the benchmark index and historically it has proven its ability to withstand such shocks.
The National Stock Exchange (NSE) recently released its white paper titled “Nifty 50 – Thirty Years of India’s Market Growth” to commemorate its 30th anniversary. The stock exchange said that no index is tested as rigorously as the benchmark index.
NSE said that Nifty 50 has endured every major shock of the last 30 years and has emerged stronger every time. NSE said this citing data from previous global crises that shook the markets. Let us also tell you what shocks the Indian stock market had to face in the last two decades and how and with how much strength the market emerged.
2000-2002: The tech bubble bursts
Nearly 25 years ago, the nearly five-year-old dot-com bubble burst, causing billions of dollars in investment losses. Between 1995 and 2000, the S&P 500 nearly tripled, while the Nasdaq 100 increased a whopping 718 percent. However, the collapse of the tech bubble caused by excessive enthusiasm for the Internet caused the Nasdaq to fall by more than 80 percent and the S&P 500 to nearly halve by October 2002. When global markets collapsed, Indian stock markets also did not remain untouched by it. According to NSE, between 2000 and 2002, the Nifty 50 fell by 51 per cent from its peak. NSE further said that, nevertheless, by 2005, it had recovered those losses with the expansion of India’s economy.
2008: Global financial crisis
Amid booming housing markets in the mid-1990s, mortgage lenders in the United States began making home loans indiscriminately, setting the stage for a major economic crisis. Lenders began offering loans to “subprime” borrowers with weak credit scores and limited ability to repay.
The bankruptcy of investment bank Lehman Brothers in 2008 is considered the turning point of the Global Financial Crisis. NSE said that Nifty 50 fell by almost 59 percent in a few months, which was its biggest fall ever at that time. However, the markets once again recovered, and in late 2013 the Nifty 50 broke all its previous records.
2020: Decline due to COVID-19
In the beginning of 2020, when news of the spread of a new virus in China started making headlines, very few people had any idea that the world was moving towards a global lockdown that would deal a huge blow to the economy. NSE reported that in 2020, the Nifty 50 fell by almost 37 per cent in a few weeks, which was one of the sharpest declines in its history.
The stock exchange said that but due to the tremendous help received from the government and increasing participation of common investors, a V-shaped recovery was seen in the market. By November 2020, the index was close to its previous peak, and just over a year later, it had almost doubled from March 2020 levels.
History points to a simple pattern
NSE said these incidents show a simple pattern: for investors who stay in the market, losses are often short-lived. As a market strategist explains, selling shares when the market falls ensures a loss, whereas investors who hold shares for a long time not only recover their losses but also earn profits. In fact, the analysis shows that Nifty 50 has never shown a loss in the last seven years.
All this is happening at a time when investors are worried about the recent sharp decline in the Indian stock markets. Due to increasing tension between Iran and Israel-America, oil prices are skyrocketing. Last week, benchmark indices Sensex and Nifty recorded a decline of about 8 percent. Due to this sharp decline, a lot of investors’ wealth has been lost so far in the month of March.
The exchange said that in the last three decades, India’s capital market has undergone tremendous changes. What was once a fragmented and mostly manual system has now transformed into the world’s most technologically advanced, transparent and accessible market infrastructure.
From its inception on November 3, 1995 to February 27, 2026, the Nifty 50 Total Return Index (TR) has given an annual return of 12.74 percent, while the Nifty 50 Price Return Index (PR) has given an annual return of 11.23% in rupee terms. On the basis of rolling returns, Nifty 50 TR Index has not recorded negative returns for any 7-year or 10-year investment period in the available history.