Two years ago, Rajesh Kumar, an engineer from Bihar, shifted his savings from fixed deposits to mutual funds, stocks, and bonds on the advice of his bank adviser. He was part of a growing trend in India, where millions of middle-class investors were pouring money into publicly traded companies. While just six years ago, only one in 14 Indian households invested in the stock market, today that figure stands at one in five.
However, the tide has turned.
Over the past six months, India’s markets have suffered a sharp downturn. Foreign investors have pulled out, valuations remain high, corporate earnings have weakened, and global capital has shifted toward China. Since reaching its peak in September, nearly $900 billion in investor wealth has been wiped out. While the decline began before U.S. President Donald Trump’s tariff policies were announced, the details emerging about the trade restrictions have further exacerbated market concerns.
The benchmark Nifty 50 index, which tracks India’s top 50 publicly traded companies, is experiencing its worst losing streak in 29 years, declining for five consecutive months. Stockbrokers report a significant slowdown in trading activity, with volumes dropping by nearly a third.
“For more than six months now, my investments have been in the red. This is the worst market experience I’ve had in the past decade,” says Kumar, 55. Having moved most of his savings into the stock market, he now faces a dilemma. His son’s private medical college tuition—amounting to 1.8 million rupees ($20,650; £16,150)—is due in July, and he may be forced to sell at a loss to cover the cost. “Once the market recovers, I’m thinking of moving some money back to the bank,” he admits.
His concerns reflect those of millions of middle-class Indians who embraced the stock market boom as part of a financial revolution sweeping across cities and towns.
The Rise of SIPs and the Influence of Finfluencers
A significant driver of India’s stock market participation has been the popularity of Systematic Investment Plans (SIPs), which allow investors to contribute fixed monthly amounts to mutual funds. The number of SIP investors has soared past 100 million—nearly tripling from 34 million just five years ago.
However, many first-time investors have entered the market with limited knowledge of risk, often swayed by social media influencers, or “finfluencers,” who promote stock trading on platforms like Instagram and YouTube. Some offer genuine insights, while others exaggerate potential gains, creating an illusion of easy wealth.
Tarun Sircar, a retired marketing manager, is among those who have embraced this new investment culture.
When his government-backed Public Provident Fund (PPF) matured last year, he sought a safe way to grow his retirement savings. Having previously suffered losses in direct stock trading, he opted for mutual funds this time—guided by a financial adviser and buoyed by a thriving market.
“I’ve put 80% of my savings into mutual funds, keeping just 20% in the bank. Now my adviser tells me, ‘Don’t check your investments for six months unless you want a heart attack!’” Sircar jokes.
Yet, he remains uncertain. “I’m both ignorant and confident,” he admits. “I don’t fully understand the market or why it’s reacting this way, but Instagram ‘experts’ make investing seem like a quick road to wealth. At the same time, I worry that I’ve been caught in a web of hype.”
Television shows hyping stocks and WhatsApp investment groups further fueled his enthusiasm. “Market analysts on TV talk up the market, and people in my WhatsApp group boast about their stock gains. Even in my apartment complex, teenagers discuss investments. One even gave me a stock tip during a badminton game! When you hear all this, you start thinking—why not give it a shot? So I did, and then the markets crashed.”
Still, Sircar remains hopeful. “My fingers are crossed. I believe the markets will recover, and my fund will be back in the green.”
The Darker Side of the Market Boom
While some investors remain optimistic, others have faced devastating losses.
Ramesh (name changed), an accounting clerk from a small industrial town in western India, fell victim to risky penny stocks and derivatives trading after being influenced by YouTube videos. Lured by get-rich-quick schemes, he borrowed money to invest in stocks during the pandemic.
Now, after losing more than $1,800—more than his annual salary—he has shut down his brokerage account and sworn off the market.
“I borrowed this money, and now creditors are after me,” he says.
Ramesh is not alone. He is among 11 million Indians who collectively lost $20 billion in futures and options trading before financial regulators intervened.
Market Uncertainty and the Road Ahead
“This market downturn is different from the crash during the COVID-19 pandemic,” says financial adviser Samir Doshi. “Back then, there was a clear path to recovery with vaccines on the horizon. But with Trump’s tariff policies in play, uncertainty looms—we simply don’t know what’s coming next.”
India’s investment boom was fueled by a combination of digital platforms, low-cost brokerage services, and government-led financial inclusion programs, making stock market access easier than ever. However, as the downturn continues, the resilience of new retail investors—many of whom entered during the market’s golden years—will be put to the test.
For now, investors like Kumar, Sircar, and Ramesh can only watch and wait. Some remain hopeful, others have already retreated, and millions are left wondering: Was the promise of stock market wealth too good to be true?
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