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.

In fact, new U.S. guidelines discourage early closure of schools because the benefits of closing schools are outweighed by social costs such as unsupervised children and missed education.

Some newspapers did play down the hysteria: The Hindustan Times daily said many deaths could be attributed to late diagnosis and other complications, and reminded readers that 16 people died of malaria in Mumbai in the last two days alone. During the monsoon, gastroenteritis is a bigger threat than swine flu.

So how about some perspective and some calm?

[Join the Great Debate on whether India is ready to tackle swine flu ; for slideshow click here]

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.

The tumble over the past 8-9 months had forced Vikrant to postpone plans to buy a new car, and when he finally bought one, he preferred a loan from his father rather than a bank loan at 14 per cent.

When I joined college, many had warned me to stay away from the stock market calling it a dangerous place, thanks to the scams by Harshad Mehta and Ketan Parekh.

I agreed then, although more out of respect, and I was more than willing to dump such talk along with my boring History textbooks.

But the events of 2008, with the credit contagion spreading to stock markets across the globe, have made me sit up and take notice.

January 2008 when the BSE Sensex scaled a peak of 21K seems a distant mirage. Just as the investors and the Indian media were eyeing 25,000 as the next target, the benchmark index has plunged to sub-9000 levels in less than 10 months (197 trading sessions to be precise) — something many of us never imagined. At least I didn’t.

“It is extremely risky to work in this sector now, the company is losing business everyday as investors are panicking,” said a sales specialist at a Delhi stock brokerage who did not want to be identified.

He is looking for a new job, this time in a different sector, after seeing the firm’s cost-cutting initiative render his colleague jobless.

But is the crash affecting life beyond the Sensex?

During the weekend, local shopping malls and markets which are usually chock-a-block with customers completing their Diwali shopping have seen less business as the urban Indian is spending less.

“The middle-class consumer is in a bad shape; nobody is in a festive mood to celebrate and buy gifts,” said Deepak Gupta, a gift shop owner in Delhi.

Gupta says he has lost around 60 percent of his Diwali business this year due to the market crash.

For his part, Gupta, has switched from costlier dry fruits to a comparatively cheaper option of a regular pack of sweets as gifts to friends.

The Bombay stock exchange opens for an hour every Diwali. Records show that the Sensex has slipped only once (2007) in the last three years during this special session.

Given the current negative sentiment in the markets, I wonder how our benchmark index will behave on Diwali.

With each passing day it’s getting tougher to guess the bottom, and for those who have heavily invested, the phrase ’stock market’ is no less than a nightmare.

But what we should do?

We always knew losses are a part of this game, and hence, we can only be patient and learn from our mistakes.

Remember, there is hardly anyone the market has spared, and maybe you can try to take a break from checking your portfolios during this festive season.

If you are invested or are currently buying in this market, this tip from investment guru Warren Buffet might come in handy — “I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.”

I just hope things get better in the next five years. Actually, I can only hope. What about you?

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

Once again, all eyes are on Washington, where on Saturday President Bush (remember him?) will meet finance ministers from the world’s wealthiest countries. The IMF will be there too with emergency funds available.

But is this the time for traditional remedies? A coordinated rate cut by central banks on Monday feels like ancient history. So what’s next? The U.S. government is talking about taking large stakes in banks to ensure liquidity (meaning free marketeer President Bush may preside over the largest nationalisation of banks in history!)

And that’s what it may take, because every other kind of faith seems to have been tossed aside - banks are simply refusing to lend. Here in India, Chidambaram is still calling for calm - insisting the fundamentals are strong.

But can you expect Indian investors to lie in Shavasan while the rest of the world takes billions out of the markets? Your views are welcome, and please, try to have a good weekend.