Sensex registers fourth lowest monthly return!

On 19th March Sensex registered a -32% fall since 19th Feb its fourth-lowest!

Published: March 19, 2020 at 6:30 pm

Last Updated on December 29, 2021 at 5:27 pm

The Sensex today (19th March) fell a further 2% to close on 28288.23. A month ago (19th Feb) it closed at 41323 – a fall of 31.54% – the fourth-lowest rolling monthly return.

If you are worried (as you should be) about the ongoing crash there here is a FAQ: Should we exit from equity mutual funds now to prevent further loss? Yesterday we reported that the Sensex lost 30% twice as fast as 2008 crash! This is the graph updated as on 19th March.

Normalized plots of Sensex market crashes with no of business days in the x axis as on 19th march 2020
Normalized plots of Sensex market crashes with no of business days in the x-axis as on 19th March 2020

This crash is now just as fast to 68% fall as the Harshad Mehta scam. Now if we plot monthly returns (rolling 20 business day) that are less than or equal to -30% we have this. When plotted in normal scale, we can appreciate how scary the current fall is.

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Sensex price movement along with monthly returns less than or equal to minus 30%
Sensex price movement along with monthly returns less than or equal to minus 30%

These are the previous occasions. The two dates in Oct 2008 are closely spaced because we consider rolling returns.

Date Monthly Returns (20 business day)
01-Jun-92 -0.33
24-Oct-08 -0.34
27-Oct-08 -0.35
19-03-2020 -0.32

At the rate at which Sensex is falling, we might see a couple of more -30% ish data points added.