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Over the past 20 years Mumbai has suffered several terror attacks. Surprisingly, the market has been up the next day
Terror attacks, as happened in three places in Mumbai on Wednesday evening, wreak havoc where they strike. Precious lives are lost and there is fear and panic. But as far the markets are concerned, the terrorists don't matter.
Markets have shown the middle finger each time terrorists have struck Mumbai. Take a look at the following table.
The first major blast was in March 1993 when there were 13 blasts across the city in reaction to the demolition of the Babri Masjid structure. The very next day, the Sensex jumped by 3%.
There followed a decade of calm and then in 2003 there were three attacks on Mumbai.
In March 2003, terrorists struck. As a train pulled into the Mulund suburb, a bomb placed in the first class compartment went off. Officially, 11 people were killed. The Sensex closed at 3,108 that day and was only marginally down the next day.
Three months later there was another attack. This time a powerful blast went off in a bus in Ghatkopar. At least four people were killed and 40 injured. The Sensex closed at 3,583 that day and ended higher the next day at 3,607.
Just two months later there was a big attack on Zaveri Bazar-where there was a blast again yesterday-and also at the Gateway of India. Some 54 people were killed officially and 244 injured. The Sensex was at that time at the start of a major bull run. It shrugged the effect of the twin blasts and ended up with a huge 3.56% gain the next day. That percentage gain meant a move of over 600 points in terms of today's Sensex level.
Exactly five years ago, on 11 July 2006, over 200 people were killed and 700 wounded in serial train bombings that occurred within a few minutes of each other on the suburban Western Railway. Again, the Sensex put on 3% the day after the tragedy.
The city suffered the most daring terror attack on 26 November 2008. It was a simultaneous attack on the Taj Palace hotel, Oberoi Trident, Leopold Café and Chhatrapati Shivaji railway Terminus station, which made worldwide headlines. This really shook the financial capital and it seemed like the end of Mumbai. And how did the Sensex respond? Stunningly, it was up again the next day.
Today, the Sensex opened just 30 points down from its previous close, then slipped further by almost 1% in initial trade, but it has recovered since. We are not forecasting that the Sensex will end higher. Simply that amid the depressing pictures of lives lost and our vulnerability to such terror attacks being exposed, there is hope.
The market price-a way of getting a collective verdict of a set of people-does not think terrorists deserve much attention.