About 1865 Indian stock market crash

The 1865 Indian stock market crash was the country’s first-ever recorded market crash, occurring before the formal establishment of the Bombay Stock Exchange. During this period, Gujarati and Parsi traders mutually traded stocks of Indian companies at the corner of Meadows Street and Rampart Row.

The crash was triggered by the end of the American Civil War in April 1865, which led to a sudden and sharp decrease in the demand for cotton. Indian companies were major exporters of cotton, and the price increase during the war had a boosting effect on their stock prices. As the demand declined post-war, the stock market experienced a rapid downturn.

The crash of 1865 revealed early vulnerabilities in India’s financial system and played a role in shaping the future development and regulation of the country’s stock market. It also led to the eventual establishment of the Bombay Stock Exchange in 1875, which went on to become one of the oldest and prominent stock exchanges in Asia.