Impact of India’s Market Downturn on Individual Investors – DW – 24/03/2025
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It was the FOMO, or Fear of Missing Out, that motivated Kanishk K.* to venture into the stock market.
He shared with DW that during the 2021 COVID lockdown in India, he noticed advertisements on Instagram featuring influencers offering tips on making money, which intrigued him to explore investment opportunities.
“I didn’t want to miss out on what people were claiming was a lucrative opportunity, and that’s what drew me into the market,” Kanishk said.
Initially, he invested in mutual funds but gradually shifted towards trading on the stock market.
Like many amateur investors, he lacked knowledge about the fundamentals of investing but kept up with market trends, especially on platforms like Reddit.
Initially, everything seemed to be going well for him.
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Stock Market Euphoria During COVID
Saloni Puj* and Ishan Shah had similar stories to share, driven by the optimistic outlook of making money during the lockdown.
Puj, a media professional from Kolkata, and Shah, who runs a cultural center in Ahmedabad, both started trading in the stock market around the pandemic lockdown.
“The market was performing exceptionally well, and it felt like anyone who was making any money was doing so through investments,” Shah noted, while adding that he followed recommendations and managed to make a profit despite his random selections.
On the other hand, Puj approached her investments with caution, aware of the market’s euphoric bubble and its risks.
September 2024 marked a downturn for all three when the market bubble burst, following months of growth and subsequent decline.
Young Retail Investors Enter Market
The initial rally in the stock market post the pandemic slump attracted a large number of Indians, reflecting the $275 billion economic stimulus package introduced by Indian Prime Minister Narendra Modi’s government in 2020.
