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| Mumbai stock markets slide on open after deadly blasts | |
| (about 1 hour later) | |
| Mumbai shares dip in early trading after a series of bomb blasts hit the city on Wednesday evening. | |
| The Mumbai Stock Exchange's Sensex index fell 0.5%, while the National Stock Exchange's Nifty index shed 0.4%. | |
| The blasts come at a time when foreign investment in India has been under pressure. | The blasts come at a time when foreign investment in India has been under pressure. |
| The last time the city experienced a similar attack in November 2008, stocks fell by almost 2%. | |
| Analysts said that security concerns may provide investors with a reason to reduce their holdings in markets that are seen as being more risky in the short-term. | Analysts said that security concerns may provide investors with a reason to reduce their holdings in markets that are seen as being more risky in the short-term. |
| Global risk appetite has been diminishing in recent months amid fears over the economic problems in the US and the debt crisis in Europe. | Global risk appetite has been diminishing in recent months amid fears over the economic problems in the US and the debt crisis in Europe. |
| "Some retailers may become nervous and close their long-term positions," said Arjuna Mahendran of HSBC Private Bank. | "Some retailers may become nervous and close their long-term positions," said Arjuna Mahendran of HSBC Private Bank. |
| However, he said that any negative impact on the stock markets is likely to be short-term. | However, he said that any negative impact on the stock markets is likely to be short-term. |
| "I think markets should snap back very fast, people have been through this before," Mr Mahendran explained. | "I think markets should snap back very fast, people have been through this before," Mr Mahendran explained. |
| Long-term growth | Long-term growth |
| Despite the blasts, the longer-term view is that India offers too much in terms of economic growth and domestic expansion for investors to remain wary. | Despite the blasts, the longer-term view is that India offers too much in terms of economic growth and domestic expansion for investors to remain wary. |
| India has been one of the fastest growing economies in the region over the past few years. It is expected to grow by close to 8% this year. | India has been one of the fastest growing economies in the region over the past few years. It is expected to grow by close to 8% this year. |
| India's rapid expansion has seen the rise of a more affluent middle class with higher disposable incomes, turning the country into a key market for global companies. | India's rapid expansion has seen the rise of a more affluent middle class with higher disposable incomes, turning the country into a key market for global companies. |
| At the same time, spending power has also been increasing in the countryside, and while it still lags urban areas, in terms of population size it is significantly larger. Some 750 million people, about two thirds of the the population, still live rural parts of the country. | At the same time, spending power has also been increasing in the countryside, and while it still lags urban areas, in terms of population size it is significantly larger. Some 750 million people, about two thirds of the the population, still live rural parts of the country. |
| While India has been expanding, developed economies such as the US and Europe are still struggling to fully recover from the affects of the global financial crisis. They have also been hit by newer developments such as the debt issues in the eurozone. | While India has been expanding, developed economies such as the US and Europe are still struggling to fully recover from the affects of the global financial crisis. They have also been hit by newer developments such as the debt issues in the eurozone. |
| Analysts said that given that scenario, India remained an attractive investment destination, even after Wednesday's bomb blasts. | Analysts said that given that scenario, India remained an attractive investment destination, even after Wednesday's bomb blasts. |
| "Emerging markets are looking much better than developed markets given all the problems we have had in Europe and even the US," said HSBC's Mr Mahendran. | "Emerging markets are looking much better than developed markets given all the problems we have had in Europe and even the US," said HSBC's Mr Mahendran. |
| "Everybody out there wants to buy India; the Indian growth story is still intact." | "Everybody out there wants to buy India; the Indian growth story is still intact." |