Swift Rise and Swifter Fall

The Indian equity market’s smooth ride came to an abrupt halt in the first week of August. Frontline index Nifty 50 lost 1,000 points in a matter of three trading days. Following the election results, the Nifty 50 index had gained roughly 4,000 points in three months, an impressive increase of almost 17 per cent. However, as the saying goes, “The market takes the staircase up but the elevator down.” In this recent correction, the market seemed to take a freefall instead of the usual elevator. Several factors have contributed to the sharp decline in the indices.