Share Market Crash: There is panic in the stock market, has the share market entered the 'danger zone'?

Share Market Crash: February is set to become the fifth consecutive month to end on a negative note. The Nifty has fallen by more than 4% so far, while the Sensex has recorded a decline of 3.93%. Since October 2024, the market has been witnessing a continuous downturn, which experts see as a 'danger zone.' This situation is similar to an event 28 years ago when the Nifty fell for five consecutive months.

Current Market Scenario

On February 24, 2025, the stock market experienced a decline of over 1%. The Sensex fell by 850 points, while the Nifty closed with a drop of more than 240 points. This decline resulted in investors losing more than ₹4 lakh crore in a single day.

Five Consecutive Months of Decline

If we analyze the data from the past five months, the downward trend in the market becomes evident:

Sensex Performance

Month	Decline (in points)	Negative Return (%)
October	4,910.72	5.82
November	+413.73	+0.52
December	1,663.78	2.08
January	638.44	0.82
February	3,046.16	3.93

Similarly, Nifty has also suffered significant losses:

Nifty Performance

Month	Decline (in points)	Negative Return (%)
October	1,605.5	6.22
November	74.25	0.31
December	1,663.78	2.08
January	486.3	2.01
February	955.05	4.06

Historical Perspective

The stock market has witnessed a five-month-long decline twice in the 1990s. The first instance occurred from 1994 to 1995, when the market dropped for eight consecutive months, falling by 31.4%. The second instance was in 1996, from July to November, when the Nifty declined by 26%. Though the current downturn is comparatively less severe, the Nifty has still fallen by more than 12% since October 2024.

China’s Influence

One of the major reasons for this decline is China's economic landscape. Since October 2024, India's market capitalization has decreased by $1 trillion, whereas China’s has grown by $2 trillion. As a result, foreign investors have reduced their investments in the Indian market to a two-year low.

Massive Losses for Investors

Over the past five months, investors have lost more than ₹76 lakh crore. The market capitalization of the Bombay Stock Exchange (BSE) was ₹4,74,35,137.15 crore on September 30, 2024, which dropped to ₹3,97,97,305.47 crore by February 24, 2025.

Conclusion

The current stock market situation remains critical. Investors need to be cautious during this period. Investment decisions should be made by considering market volatility, global economic conditions, and foreign investment trends. Experts believe that the market is likely to experience further fluctuations in the near future.