Boom to gloom: India middle-class jitters amid trillion-dollar market rout

Two years ago, on his bank adviser's suggestion, Rajesh Kumar pulled out his savings - fixed deposits included - and shifted to mutual funds, stocks and bonds.

With India's stock market booming, Mr Kumar, a Bihar-based engineer, ed millions investing in publicly traded companies. Six years ago, only one in 14 Indian households channelled their savings into the stock market - now, it's one in five.

But the tide has turned.

For six months, India's markets have slid as foreign investors pulled out, valuations remained high, earnings weakened and global capital shifted to China - wiping out $900bn in investor value since their September peak. While the decline began before US President Donald Trump's tariff announcements, they have now become a bigger drag as more details emerge.

India's benchmark Nifty 50 share index, which tracks the country's top 50 publicly traded companies, is on its longest losing streak in 29 years, declining for five straight months. This is a significant slump in one of the world's fastest-growing markets. Stock brokers are reporting that their activity has dropped by a third.

"For more than six months now, my investments have been in the red. This is the worst experience in the last decade that I have been invested in stock market," Mr Kumar says.

Mr Kumar, 55, now keeps little money in the bank, having shifted most of his savings to the stock market. With his son's 1.8 million-rupee ($20,650; £16,150) private medical college fee due in July, he worries about selling investments at a loss to cover it. "Once the market recovers, I'm thinking of moving some money back to the bank," he says.

His anxieties reflect those of millions of middle-class Indians who have poured into the stock market from cities big and small - part of a financial revolution.

The go-to investment route is Systematic Investment Plans (SIPs), where funds collect fixed monthly contributions. The number of Indians investing through SIPs has soared past 100 million, nearly trebling from 34 million five years ago. Many first-time investors, lured by the promise of high returns, enter with limited risk awareness - often influenced by a wave of social media "finfluencers" on platforms like Instagram and YouTube, a mixed bag of experts and amateurs alike.

Meet Tarun Sircar, a retired marketing manager, and you get a glimpse of India's new investor.

When his public provident fund - a government-backed tax-free investment - matured last year, he sought a way to secure his retirement. Burnt by past stock market losses, he turned to mutual funds - this time with an adviser's help and a buoyant market.

"I've put 80% of my savings into mutual funds, keeping just 20% in the bank. Now my adviser warns me - Don't check your investments for six months, unless you want a heart attack!"

For now, Mr Sircar isn't entirely sure if moving his retirement fund into the stock market was the right decision. "I'm both ignorant and confident," he says with wry candour. "Ignorant about what's happening and why the market is reacting this way, yet confident because Instagram 'experts' make investing sound like a fast track to millions. At the same time, I know I might be caught in a web of deception and hype."

Mr Sircar says he was drawn to the markets by TV shows hyping stocks and excited chatter in WhatsApp groups. "The TV anchors talk up the market and people in my WhatsApp group boast about their stock market gains," he says.

In his sprawling apartment complex, even teenagers discuss investments - in fact, during a bton game, a teenager gave him a hot tip on a telecom stock. "When you hear all this around you, you start thinking - why not give it a shot? So I did, and then the markets crashed."

Mr Sircar lives in hope. "My fingers are crossed. I am sure the markets will recover, and my fund will be back in green."

There are others who have taken more risks and already lost money. Lured by get-rich-quick videos, Ramesh (name changed), an ing clerk from a small industrial town in western India, borrowed money to invest in stocks during the pandemic.

Hooked to YouTube influencers, he dived into risky penny stocks and trading in derivatives. This month, after losing over $1,800 - more than his annual salary - he shut his brokerage and swore off the market.

"I borrowed this money, and now creditors are after me," he says.

Ramesh is one of 11 million Indians who lost a combined $20bn in futures and options trades before regulators stepped in.

"This crash is unlike the one during the Covid pandemic," says financial adviser Samir Doshi. "Back then, we had a clear path to recovery with vaccines on the horizon. But with the Trump factor in play, uncertainty looms - we simply don't know what's next."

Fuelled by digital platforms, low-cost brokerages and government-driven financial inclusion, investing has become more accessible - smartphones and -friendly apps have simplified market participation, drawing a broader, younger audience seeking alternatives to traditional assets.

On the flip side, many new Indian investors need a reality check. "The stock market isn't a gambling den - you must manage expectations," says Monika Halan, author and financial educator. "Invest in equity only what you won't need for at least seven years. If you're taking on risk, understand the downside: How much could I lose? Can I afford that loss":[]}