The Hindu Business Line : Can Manmohan pull up a trump card?

Bidyut (an economics professor), Divya (a journalist), Jogin (a student) and Mack (an American expat working in India) are sipping tea in a café when the news on the television on the premises catches Jogin’s eye.

Jogin: Shivraj Patil has resigned as home minister.

(Chuckle) That news alone should improve the market.

Bidyut: And Chidambaram is taking over as the home

minister. But the real good news for the market is that

Manmohan Singh will also handle the finance portfolio.

Mack: Now, that’s real good news. Markets should be

happy at that.

Divya: At least we will stop hearing comments such as

‘India is decoupled’ while staring at a world on the brink

of recession.

Jogin: This is the time to give a fiscal and monetary

stimulus to the market.

Mack: I read a news report that bailout packages are

not propping up the market. If that is true, then no

amount of stimulus might help.

Divya: The real question is will Manmohan Singh

becoming finance minister help stocks that have been

battered? The terror strikes is additional bad news

for airline, hotels, hospitality related

and travel companies.

Bidyut: If tourist inflow starts dwindling, it could get

worse for the companies.

Mack: Tourism could take a hit as a report from the UK

has put India on the list of 20 most dangerous places in

the world.

Divya: Realty will also feel the heat. It is already

grappling with falling demand.

Bidyut: That is possibility. A realtor has Pune has said

his business took a beating with the IT and auto sectors

struggling. I also heard that cancellations of hotel

reservations have started in Udaipur.

Mack: Not too surprising. According to a World Bank

report, after the Bali bombing in 2002 it took almost a

year for the island’s tourism to recover.

Jogin: I am also worried by Chinese president’s

comment that the nation’s competitiveness and

trade strength are being threatened by the

economic downturn.

Divya: We could be better-off due to several reasons.

Foreigners visit India for more than one reason.

Tourism is a huge revenue earner, but lots of

people come on business trips too. We will bounce back.

Bidyut: True, I guess India’s resilience was reflected by

the actions of the Taj staff in the face of adversity.

Great work by the security forces, too.

Jogin: True. With such staff on board, the company

need not worry how its stocks are faring!

Bidyut: Anyway, the fallouts of the terror attacks

would only trouble the markets for a short time. With

Manmohan Singh at the helm, the market

reactions should be better.

Mack: We should have someone like Warren Buffett at

the helm. His investments actually went up though the

Standard & Poor’s 500 Financials Index fell.

Divya: Let us hope the new finance minister can do

a Buffet act.

Bidyut: Same hopes from my side for the new home

minister, too.

Jogin: Well, Chidambaram was the finance minister

when the markets started posting falling numbers.

Let us hope he can do that to the number of terror

attacks on the country.

Ram with input from Badri

Blog at http://MarketChat.blogspot.com