Stock markets have traditionally seen a fight for supremacy amongst Bulls and Bears. Those market participants who are optimistic and believe that the markets will move up are called 'Bulls', and those who hold a pessimistic view and believe that the markets will move down are called 'Bears'. After lying low for several months bulls have seized the initiative from the bears in the past few weeks on the back of improved liquidity and positive FII inflows. The net FII investments into Indian stock market are a positive Rs.5560 crores for the month of April 2009. The current bull run on the markets has been fuelled by FIIs and domestic Mutual funds to a large extent. The markets have run up too quickly for the comfort of many market participants, who are now looking for an opportunity to pull down the markets.
'Swine flu' may prove to be the trigger for the end of the current bull run. 'Swines' are animal species including pigs, hogs, and boars, having a stout body with thick skin, a short neck, and a movable snout. Another definition of a swine is 'a person regarded as brutish or contemptible'. The World Health Organisation (WHO) has raised its level of alert about 'swine flu' to level 5, just below the pandemic level 6.
The economic impact of the killer epidemic can be devastating:
- It could be a drag on India's economic recovery
- Demand for products and services may dip
- Global GDP could be adversely affected
- Developing countries may be the worst hit
- Sectors like Aviation and Hospitality to be adversely impacted
Swines have the capacity to win the game against Bulls and Bears on the markets. The markets are at crossroads and waiting for an excuse to retreat, 'swine flu' may just be that excuse. The bigger threat to Indian markets comes from the swines in the garb of Indian politicians who may derail the democratic process by their sinister designs after the electoral process is completed on the 16th of May 2009. Any uncertainty created by the 'Swines' does not auger well for the immediate future of our markets. It is better to remain in cash, and wait for the things to settle.
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