The Bombay Stock Exchange
It was an unusually intense Friday. Usually, it’s just another week winding down, another edition to make, pretty slow on news.
I have always been a Test cricket freak and Anil Kumble was showing why he’s among the three greatest — if the most underrated – Indian cricketers of the last decade. The master spinner was digging his heels into the ground, refusing to give away his wicket to Brett Lee and Stuart Clark on a hot Adelaide morning.
India had just ended the Aussies’ dream of a world record 17th consecutive Test win in Perth, of all places, and had weathered with aplomb a storm of controversy over allegations of racism against off-spinner Harbhajan Singh and poor umpiring that had cost it the series.
Kumble showed the meaning of the word determination by scoring a dogged 87, simply refusing to get out, taking India to a well-compiled 526.
It was riveting Test cricket.
But I was torn between the match and the stock market. If Test cricket is an old passion, then the economy is a more recent one. In the last few years, I have found I enjoy tracking it and, more importantly, I understand a lot of it.
Like the Australian tour, the Sensex had been on a rough ride in the past few weeks. Potfuls of foreign money, stupendous growth rates and high consumer confidence had taken the index to well past 21,000 points and the peak seemed nowhere near. The sky seemed to low a limit.
And then, the wheels came off. The bad news began pouring in. The US, from where most of the foreign money was coming, was in the grip of a debt crisis. There were a record number of defaults on high-risk, high-interest loans given to those with poor credit ratings (such debt is known as sub-prime credit). Citigroup alone is said to have written off $7.5 billion (that’s about Rs 30,000 crore) on sub-prime losses.
Bank after bank found that their debtors would not pay up.
Then came US unemployment data. Job losses were on the rise and more people were finding employment out of reach. Another sure sign that a dreaded recession was around the corner.
The ‘R’ word was suddenly peppering every conversation.
After dropping record levels, forcing a shutdown earlier in the week, the Sensex was finding the strength to pick itself off the ground. But every three steps it took forward, it seemed to take one back. The recovery wasn’t looking convinvcing at all.
On Friday, it suddenly seemed to have shrugged off the indecision. It steadied, rose and then rose some more. By the time it was done, it had risen 1,140 points, something it had never done before. The market seemed to be sending out a message: I may be down, but I’m not out; I may be trounced, but I won’t go without a fight.
Exactly what Kumble seemed to be telling the Aussies.
The series may be lost — at the time of writing, the Adelaide Test seems to be heading for a draw, meaning the end result will be 2-1 in favour of the Aussies — but India will not return disgraced.
A recession in the US may still hurt the Sensex, but it has shown Kumble-like grit that has spawned respect even among the sceptics.
From 3,000-point levels just seven years ago, the index is today at 18,000-plus. A downturn should take it to about 15,000-point levels. But even that is 500% appreciation in just seven years — and that’s during a recession.
The Indian cricket team, from being pushovers anywhere abroad, have held their heads high in the toughest tour you can get in world cricket today. India has now won series in the West Indies, England, Pakistan and an all-important Test in Perth in the last few years.
The parallels between the Sensex and Indian cricket are there for all to see.
I think the next few months will keep me rivetted to the TV — torn between Star Cricket and CNBC-TV18. And I’ll be smiling all the way.
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Ashraf Engineer
