India Insight

The toll in India from the H1N1 pandemic rose this week, but a look at the screaming TV headlines and graphic visuals in newspapers would suggest a country under siege from something akin to the bubonic plague.

Dramatic headlines and graphic visuals in the media; reporters looking alarmed behind their masks; commuters with handkerchiefs and scarves around their mouths; and long lines of people outside screening centres, imagining the worst.

Even as the health minister and state officials appealed for calm and warned against hoarding masks and flu drug Tamiflu, the red splashes of breaking news and the tone verging on hysteria were unabated.

The World Health Organisation estimates the H1N1 swine flu could affect 2 billion people globally, and experts consider the pandemic to be moderate.

That hasn’t stopped the breathless media coverage, selling of masks and sanitisers at several times the usual price and panicky schools shutting down.

Diwali, the festival of lights, is here but do we see a pall of gloom with the BSE Sensex crashing more than 50 percent since January 2008?

Things have come to such a pass that some people have simply stopped looking at their portfolios. They think it’s too late now to cut losses.

“I have now lost faith in long-term investment, I wish I had booked profits in January when my portfolio had doubled,” says my friend Vikrant, who works for a leading business newspaper in New Delhi.

Would someone please remind folks that it’s Friday and we all deserve a relaxing weekend? I for one will be doing my usual Saturday morning Yoga. But it’s nasty out there – the contagion has spread, and panic is now the correct adjective.

The overnight Dow crash hit Asia hard – the Sensex is down at least 9 percent and looks like it’s headed for a holiday south of 10,000, the rupee has hit an all time low and in Japan the Nikkei tumbled another 10 percent. Looks like that decision to let Lehman go bust set off the mother of all chain reactions…and Indian markets may be headed back to 2006 levels.

Here’s our resident technical analyst Phil Smith:

…As the chart shows the SENSEX has broken through some very strong and very important support points in the past couple of weeks. These are clearly showed on the chart with the support at 11,900 to 12,500 being broken effortlessly. The next major support levels for this market now stand at around 9,700 as marked and coincides with the old support levels reached back in 2006 when the market staged its dramatic correction then. Currently all the technical indicators are bearish as they have been since the middle of September