A few numbers help put the Indian stock market in perspective, from the first SENSEX close to the growing number of investors. Here are some of them, and a note on how to read them.
Figures are as reported in 2020 and have changed since. Check current data before relying on any number here.
Eight facts worth knowing
- 01
A first-of-its-kind index
The BSE SENSEX, India’s first equity index, made its debut on January 2, 1986. Its base year is 1978-79, set at 100. It closed above 1,000 for the first time on July 25, 1990, about four and a half years later.
- 02
A large market
As of October 2020, the total market value of companies listed on the Bombay Stock Exchange stood at about ₹160,680 billion, or roughly US$2.2 trillion.
- 03
Sharp falls come with turbulence
In moments of economic stress, the market has seen very large single-day declines. March 2020, at the height of the pandemic, produced several of the sharpest in the index’s history.
- 04
Bull markets and bear markets
India has seen long stretches of rising prices, and these have created wealth for some investors. It has also seen long stretches of decline. No one can say in advance how long either will last.
- 05
Demat accounts have grown
India’s population was around 1.25 billion in 2011, with about 19 million Demat accounts, roughly 1.5% of the population. By 2020, with a population near 1.38 billion, there were about 40.8 million accounts, roughly 3%.
- 06
There is room to grow
In 2020, surveys put the share of US adults who invest in the market at about 55%. Accounts and investors are different things, so treat any comparison as a rough indication only.
- 07
More individuals taking part
Retail participation has risen steadily, with more individual investors engaging in equity markets directly.
- 08
Many sectors under one roof
Listed companies span technology, finance, manufacturing, consumer goods and more, which reflects how varied the economy is.
The numbers behind the facts
Three views of the same story. Falls and rises both belong to it.
Notable single-day falls in the SENSEX
| Date | Event | Points lost | % lost |
|---|---|---|---|
| 23 Mar 2020 | COVID-19 | 3,934.72 | 13.15% |
| 28 Apr 1992 | Harshad Mehta scam | 570 | 12.77% |
| 24 Oct 2008 | US financial crisis | 1,070 | 10.95% |
| 12 Mar 2020 | COVID-19 | 2,919.26 | 8.18% |
| 16 Mar 2020 | COVID-19 | 2,713.41 | 7.96% |
| 21 Jan 2008 | US financial crisis | 1,408 | 7.40% |
| 18 May 2006 | — | 826 | 6.76% |
| 17 Mar 2008 | US financial crisis | 951 | 6.03% |
| 24 Aug 2015 | — | 1,624 | 5.93% |
| 9 Nov 2016 | Demonetisation | 1,689 | 5.90% |
A selection, not a complete list. Figures as reported in 2020 and rounded.
Long rises in the SENSEX
| Period | Duration | Start (approx.) | End (approx.) | Rise (approx.) |
|---|---|---|---|---|
| 1985–86 | 24 months | 230 | 670 | ≈ 190% |
| 1991–92 | 18 months | 980 | 4,000 | ≈ 310% |
| 1998–2000 | 16 months | 2,700 | 6,000 | ≈ 120% |
| 2003–08 | 60 months | 3,000 | 20,000 | ≈ 570% |
| 2013–19 | 72 months | 18,000 | 40,000 | ≈ 120% |
Levels are rounded, and the rise is worked out from them. Every long rise has been followed by a period of decline, and past rises do not predict future ones.
Demat accounts, FY11 to FY20
Total Demat accounts at the end of FY2020 stood at 40.8 million, up from 35.9 million on 31 March 2019.
Source: SEBI, as shown in the original article. Accounts are not the same as individual investors.
The market has grown and more people take part. Numbers like these describe the past, not what comes next.
Read the numbers with care
Stories of shares that multiplied many times over are told often. Stories of the many that did not are told far less. Looking only at the winners with hindsight gives a flattering picture, and past returns do not predict future ones.
That is why a sound approach rests on a plan, defined risk and realistic expectations, not on a hunt for the next big winner.
Keep learning.
MadhusudhanFounder and Mentor, Mars Equity
This article is for education. It is not investment, financial or personal advice, a recommendation or an offer to buy or sell any security. Markets carry risk, including loss of capital. Figures are historical and illustrative.