Terror and war are only different in scale. Their aim and effect are broadly similar and the sentiments they evoke are also the same.
The Kargil war lasted a few months and saw the markets gapping up from May 1999 till February 2002, 50 per cent higher.
Economic recessions become news after more than a year of collapse (like now). And, economic depressions are followed by wars not vice versa. This was the case of US Civil War of 1857, which was preceded by a depression.
The 1932 depression was also followed by World War II. The World War I also came after a recession, not before it.
The 1942-66 Dow bull market started from the base of WW II.
We could extend this argument to terror attacks also, and it is not a coincidence that Mumbai terror attacks did not come at a market top in January 2008, but after markets collapsed 60 per cent and fell for more than a year.
Image: The Taj Heritage in all its splendour before the terror attack. | Photographs: Kind Courtesy The Centenary Taj: 100 Years of Glory, published by The Taj Magazine
Also read: A free insurance cover for terror!
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