Significant Dates and Events in The Indian Stock Market. The Indian stock market has its origins dating to before the year 1875. In that year, The Native Share & Stock Broker’s Association was formed. Before that, a number of traders came together and traded under the shade of some trees. The number of traders slowly increased and finally, the Association was formed after a permanent location for the traders was established at Dalal Street in Mumbai (formerly Bombay). This resulted in the BSE or the Bombay Stock Exchange which eventually paved the way for the formation of the BSE SENSEX and the NSE (National Stock Exchange). You can read more about the companies and stocks listed and traded on the BSE and NSE on the BankBazaar India site. Here, you can read about significant events and milestones that impacted the Indian stock market.
Permanent recognition for the BSE
In the year 1957, in the month of August, permanent recognition was granted to the BSE. This was done through the Securities Contracts Regulation Act also known as the SCRA.
Formation of BSE SENSEX
There was no formal way to track the performance of the BSE. In order to do this, a SENSEX or a sensitive index was created using the top 30 companies listed on the BSE. The S&P BSE SENSEX was begun in the year 1986. This was India’s first equity index.
- The S&P BSE SENSEX rose over 1,000 and closed at over that value for the first time in 1990. This was the first milestone of many more to come in the following years.
- In the year 1992, the SENSEX closed above the 2,000 points mark on 15 January.
- The 3,000 mark was achieved in the year 1992 on the last day of the month of February. The SENSEX then proceeded to close over the 4,000 points mark on 30 March 1992. It was the first time the SENSEX rose a couple of thousand points in the same year.
- The first time that the SENSEX rose and stayed over the 5,000 points mark at the close of the trading day was on 11 October 1999.
- The SENSEX passed the 6,000 points mark on 11 February 2000.
- In 2005, the 7,000 points mark was achieved. This high was attributed to the large gains made on the scrips of the Reliance group of companies. In the same year, the 8,000 points mark was also achieved. The SENSEX kept rising that year, resulting in it closing at over 9,000 points.
- In 2006, the SENSEX crossed 10,000 points.
- The next biggest milestone was achieving the 20,000 point mark. This was achieved in 2007.
- The 30,000 point was reached in the year 2015. As of July 2018, the highest level recorded was 37,000 points achieved on 27 July 2018.
- In 2006, the SENSEX crashed by 1,100 points within a single day. This was one of the biggest losses on the market. The fall was so bad that it required an intervention by SEBI and the Finance Minister at the time. They assured the public that the fall was due to temporary volatility and that they should continue to be invested in the market. This helped the SENSEX recover.
- The next fall was in July 2007 when the SENSEX fell by 615 points. This was owing to global events like the subprime mortgage crisis in the United States. The crisis had an effect around the world and India was not spared from the effect.
- In September 2007, there was another dip in the SENSEX with it losing about 1,744 points. While the index did recover a bit from that, there was another dip the next day of about 717 points.
- There was a dip of about 1,408 points in the month of January in 2008 that was fuelled by fears of recession in the American economy.
- There were two more days in 2009 when the market plunged. The first one happened in the month of January when the Satyam scandal was exposed. This resulted in a big fall in the markets.
- In addition to these, there were a few more market plunges in 2015, 2016, and 2018. But the market always recovered from those instances.
Falls in the stock market
The first ever stock market crash recorded in India was in the year 1865. This was owing to rampant speculation regarding the results of the American Civil War during the time, causing high artificial increases in stock prices. The bubble eventually burst, leading to the first crash.
The next biggest crash was in the year 1992 when the Indian stock market suffered the aftereffects of a scam. This scam was perpetrated by a person called Harshad Mehta. He managed to scam the entire market by making use of a way to manipulate the stock market. This was done in part by using bank receipts that were actually of no value. The scandal value was about Rs.4,999 crore.
- Similar to the SENSEX, the performance of NIFTY is also tracked. The NIFTY achieved a number of milestones beginning 2004.
- The first milestone was the 2,000 points milestone, achieved in December 2004.
- The 3,000 and 4,000 point milestones were reached in the year 2006.
- In the year 2007, the NIFTY crossed both the 5,000 and 6,000 point marks.
- Again, in 2014, the NIFTY crossed both the 7,000 and the 8,000 point mark.
- Finally, in the year 2017, the NIFTY reached the 9,000 point mark which was later surpassed by the NIFTY reaching the 10,000 point mark.
In addition to the significant events mentioned previously, there are a few more. ETF listings were launched in the year 2002. In 2008, the NSE offered a way to trade in currency futures. This was augmented by the launch of the option to trade in currency options in the year 2010.
2011 marked the year in which the NSE began trading in index futures and global indices. This was a significant move. In 2015, the NSE entered in an MoU with the London Stock Exchange Group. In 2016, the NSE started a platform that would support sovereign gold bond issues. An electronic book-building platform was also launched in the same year.