Blasts leave economy unmoved

New Delhi, July 17:

If the perpetrators of Tuesday’s serial bombings in the financial hub and main port of Mumbai had hoped to apply the brakes on India’s fast-growing economy, they are bound to be disappointed. A day after blasts, in packed suburban trains, the stock indices went up by three per cent.

But, analysts said the spurt in militant activity in India may yet have a medium or even long-term impact on the economy by creating an environment of uncertainty and diminishing investor confidence — especially if the bombings continue. Mumbai-based investment analyst Jawahir Mulraj said that while the blasts may have no immediate impact on the markets or the economy, “I think many share my fear that tomorrow something much worse could happen.” Some noted that the rise in stock indices was on account of the country’s software major Infosys announcing that its first-quarter earnings had gone up by 50 per cent and the government reporting a ten percent rise in manufacturing. That the series of eight blasts, which killed 200 people and injured more than thrice the number, was aimed at hurting the economy was clear from the fact that they were planted in the first class compartments, patronised by wealthier commuters.

‘’Markets seem to be reacting cold-bloodedly and are signalling they aren’t ruled by headlines but by bottomlines,” wrote Gautam Chikarmane.