Zerodha CEO Nithin Kamath on Market Crash and Falling Trading Volumes

The Indian stock market recently saw a major crash, with the Sensex dropping over 1,000 points and the Nifty 50 falling significantly. This decline raised concerns among investors and traders. Nithin Kamath, CEO of Zerodha, pointed out an important trend—trading volumes have dropped sharply.

Kamath explained that during market crashes, retail investors become cautious and avoid trading, leading to lower volumes. He noted that when stock prices fall, investors hesitate to buy, fearing further losses. This results in reduced activity in the market. Lower volumes also impact liquidity, making it harder for stocks to recover quickly.

He emphasized that such phases are common in stock markets, and investors should focus on long-term strategies rather than reacting to short-term movements. Kamath advised investors to remain patient, manage risks wisely, and avoid panic-driven decisions. Strong companies with good fundamentals can recover over time.