Zerodha CEO Nithin Kamath’s stark warning for Indian stock market: ‘If markets fall sharply, investors might…’

Zerodha co-founder and chief executive officer (CEO) Nithin Kamath shared a stark warning for the Indian stock market amid the current bloodbath that ‘If markets fall sharply, D-Street investors might stay out of the market for years—just like they did after the 2008 global financial crisis.’ According to data shared by Kamath in a post on ‘X’ (formerly Twitter), India’s net flows into equity-oriented mutual fund (MF) schemes dipped sharply between 2008 and 2014.

However, Kamath also highlighted that India’s retail investors have consistently been net buyers of equities in the last five years, starting from the COVID-led market participation. According to the India Inc leader, retail investors have been the backbone of the Indian stock market’s rally between 2020 and 2024 after consistently ‘buying into dips’ amid external risks and global headwinds.

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“One of the crazy things about the last five-odd years is that retail investors have consistently been net buyers of equities. Whether they’ll continue to buy the dip is anybody’s guess. “By the way, if markets fall sharply, investors might stay out of the market for years—just like they did after 2008,” said Kamath in his post on ‘X’.

Indian stock market crash in 2008

Lehman Brothers’ collapse in the US and the subprime mortgage crisis triggered a global recession. The Sensex dropped over 60 per cent from its peak of 21,206 in January 2008 to 8,160 by October 2008. The government’s stimulus measures, the central bank’s intervention, and global liquidity helped a rebound by 2009.

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Kamath’s warning comes as heightened volatility grips the Indian stock market due to global trade war concerns triggered by US President Donald Trump’s retaliatory tariffs. On Monday, the 30-share BSE Sensex tanked 2,226.79 points or 2.95 per cent, and the Nifty 50 index tumbled 742.85 points or 3.24 per cent, marking their worst single-day decline in 10 months after the global equity markets went into a tailspin on recession fears due to the US tariff war.

However, on Tuesday, the Nifty 50 snapped its three-day decline to post its best session in three months, while the Sensex posted its worst session in three weeks after rising 1.69 per cent to 22,535.85 and 1.49 per cent to 74,227.08, respectively. Investors’ wealth swelled by ₹7.32 lakh crore with the comeback.

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However, most D-Street analysts advised participants not to read too much into this single-day recovery, as tariff-related developments will likely keep volatility elevated. Experts recommend traders should maintain a hedged approach for their strategy, focusing on stocks showing relatively higher strength.”

Meanwhile, in a separate post, Kamath pointed out that gold has delivered better returns than the Nifty 50 since 2000. “I’m cherry-picking the date, but it’s kinda crazy that since 2000, gold seems to have generated higher returns than Nifty,” he said. Kamath clarified his point by sharing data from the last 25 years, comparing the performance of Nifty 50 and the yellow precious metal.

The data showed that gold has grown by 2000 per cent, while the NSE Nifty 50 index surged by 1,470 per cent during the same period. In 2025, gold delivered an 18 per cent return, while the Nifty LargeMid 250 lost six per cent.

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