The Indian markets closed with cataclysmic losses on Friday, February 28. The Indian benchmark indices ended the month on a disastrous note, with the BSE Sensex closing with losses of a mammoth 1414.33 points or 1.90 per cent.

Nifty Falls To Historic Lows

The NSE Nifty 50 also suffered major losses, closing at 22,124.70, with losses of 1.86 per cent or 420.35 points.

This was bad news for all the entire Indian market, but was particularly bad for Nifty 50. The index, which was started in 1996, about 28 years ago, had one of its worst showings.

Previous Instances Of Dip

In a first, in close to 30 years or, more precisely, in 28 years, the index has declined for 5 consecutive months. This is one of the worst performances that the index has experienced in over 30 years of the National Stock Exchange or NSE, which was established in 1992.

Previously, the Nifty experienced such monumental decline in 1996, when the index slumped by a colossal 26 per cent after diminishing in value for 5 months of trade, from July-November 1996.

In the recent past, the index suffered similar shocks in 2001, when, after a decline of 4 consecutive months, between June and September, the Nifty dipped by a cumulative 21.8 per cent.

Between May and August 1998, after dipping for 4 months, the index's total value declined by 26.4 per cent.

Between September 1994 and April 1995, the markets saw a major decline of 8 months, taking the overall decline suffered to 31.4 per cent.

In the past months of trade, the Nifty index has declined by an overall 5.29 per cent or 1,236.35 points.

Nifty In Decline

Furthermore, in the past 6 months, the Nifty index has declined by a colossal 12.48 per cent or 3,154.00 points, taking its current value to 22,124.70 points, far below its 52 week-high of 26,277.35 points.

While many factors are at play for this development, few of the commonly understood factors are a decline or exodus of FIIs.

This is supplemented by a perceived liquidity problem, which the RBI appears to be trying to sort out. In addition fall of Mid Cap and Small Cap companies at the bourse has not aided the free fall.

As per analysts, the larger decline is part of the correction that is currently transpiring, and many hold the opinion, that markets are in correction mode.