Terrorism and markets make for the strangest of partners, simultaneously in and out of sync with one another. The stock market has its own paradigm (making profits over time), its own logic (buying low, selling high), its own reasons (economic, sectoral, firm level growth). So does the terror industry—paradigm (create fear over time), logic (fear creates uncertainty in the minds and monies of governments), reason (if I have might and money, who can stop me from reaching my goals?). But try and spot a trend between them or seek a mutual interdependence and your trend lines will mirror INSAT-4C’s flight path.

Best to get away from the noise and concentrate on getting facts and data. And then try and convert them into information. Take Sensex movements on five important terrorist attacks in India and one that no government or market can ignore. In India, it’s the March 12, 1993 Mumbai Blasts; the December 13, 2001 Parliament Attack; the October 29, 2005 Diwali Attacks in Delhi; the March 7, 2006 Varanasi Attacks; and yesterday’s Terrible Tuesday. And the global can’t-ignore September 11, 2001.

As I try and crunch numbers, trying to find out when the markets would have been able to assimilate the terror attack information (if the attacks were in the afternoon, the Sensex closing of the same day; if evening, the next day’s closing), I come up against the frustrating researcher’s wall: there is no trend. Of the six attacks analysed, half saw the Sensex go up while half pulled it down. While the biggest absolute fall came in the Varanasi attack, which saw the Sensex fall 217 points (2 per cent), the biggest percentage plunge followed September 11, when it crashed 3.7 per cent (118 points). On the other side, the biggest absolute as well as percentage gain came yesterday, when the market rose 316 points or 3 per cent, leaving Delhi’s Diwali Blasts a 100 points behind.

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