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Markets tank on war
Fears of prolonged US-Iraq conflict dogs sentiment

By Mehraboon Jamshedji Irani

Saddam Hussein. There's been no let-up in the status-quo in the market. If at all, there's an air of desperation and dejection that has set in. The prolonged uncertainty related to the Middle-East crisis is taking an emotional toll besides the physical erosion in asset values. The market sentiment has effectively reached near bearish consensus. However, price action is not fully consistent with the fear and trepidation that investors carry within their hearts. In plain terms, we haven't yet seen capitulation of the kind we witnessed in mid-to-late 2002. The breach by a short margin of what the market viewed as crucial supports, 3100 for the SENSEX and 1000 for the Nifty, has created a scare in the hearts of traders and investors.

We must see a quick reversal soon or else the markets would succumb to further selling pressure. Last week, share prices fell sharply as hopes of a swift and short US-Iraq war were belied following the stiff resistance from Iraqi troops to the US-led coalition's attacks, especially in Baghdad. The market slide could have been sharper but for the support lent by some local mutual funds in a bid to prop up the year-end net asset values (NAVs) of their schemes.

Unwinding of positions by traders on expiry of March 2003 contracts in the derivatives segment and withdrawal of funds from financiers ahead of the year-end also led to the weakness in the market.

The Indo-Pak tensions added to the market's woes. Soon after India test-fired a short-range missile, Pakistan followed suit. The test-firing of the missile came just a few days after a sudden flare-up of terrorist activity in Jammu & Kashmir, where militants killed 24 Kashmiri Pandits. India blamed Pakistan for the attack.

Meanwhile, apart from the local market, bourses across the world lost steam amid concerns that the ongoing war could get prolonged. There were reports in the US media that the armed conflict could go on for months rather than weeks.

The surge in global crude oil prices made investors edgy. Oil prices, that had witnessed a setback at the onset of the war, are once again moving north. Galloping oil prices may hit the already fragile economies of the world further. Oil is a key ingredient in a number of industries and a price hike would have a cascading effect, feel analysts.

The US army commander, and the stock traders world over, have just begun to make a bitter realisation - the early dreams of conquering Baghdad and overthrowing the ruling leadership in a few days, that seemed a possibility just a week ago, now looks potently unrealistic. It's a war, not a catwalk by fashionable ladies.

Traders will soon get frustrated at the see-sawing of the market, depending on the news flow from across the Gulf. The burnout from this will get reflected in the fatigue, with people getting over-saturated by the constant 2-way news and starting to just hold off from doing anything rather than trying to play the short swings.

As one veteran broker concluded, "I don't think investors are discouraged, they're just not sure what to do. People want to get out of the way."

Stocks still dogged by war
Key reports in the week ahead will show how the U.S. economy stood as the country went to war

By Justin Lahart

NEW YORK (CNN/Money): Wall Street's enthusiasm that war with Iraq would last little more than a week may have been dashed, but the market still seems to think that everything will be mopped up in fairly short order.

"Overall it still seems like the market has an optimistic view of the war," said Rosenblatt Securities head trader David Gang. "That at some point in the next couple of months, it will be over."

Even a couple of months would be a stretch in many Wall Streeters' minds. In their modeling, most economists seem to have reckoned on conflict lasting just a month.

The Saddam futures contracts administered by the Dublin-based firm Tradesports, which allow participants -- mostly professional traders active in the New York and London markets -- to bet on how long Saddam Hussein will hang on, are showing a 62 percent chance the Iraqi leader will be gone by the end of April.

With the exception of Israel's six-day war in 1968, even short wars have tended to take some time. The 1991 Gulf War went 74 days from the allies' first strike to the ceasefire. Britain's war with Argentina over the Falklands took 37 days (the British armada had to get there first). In 1999, Serb forces agreed to withdraw from Kosovo 79 days after NATO started bombing.

The key to market action in the week ahead, then, will be to what degree the actual war meets Wall Street's expectations. Anyone trying to figure this out so far (which is to say everyone), has found themselves deep in the rabbit hole among press reports that Iraqi resistance has proved steeper than what the Bush administration expected. Perhaps there will be more clarity come next Friday.

When the economy comes marching home again... One thing that everyone has a little more clarity on is the current state of the economy -- lousy. Worries over war and higher energy prices have weighed on businesses and consumers alike, leading to a steady erosion in business activity in February and March.

Two key economic reports for March in the coming week, the Purchasing Managers' Index on Tuesday and the monthly jobs report on Friday, will give some inkling of how bad things really are. Economists expect the Purchasing Managers' Index to drop below 50 for the first time since October, signaling contraction in the manufacturing economy.

They think the economy lost jobs again in March, and that the unemployment rate rose to 5.9 percent.

How the reports actually come in will be important for two reasons. First, they will give a firmer sense of how uncertainty in the run up to the war and in the war's opening moments affected business attitudes. Even more crucially, they will indicate what kind of footing the U.S. economy is on as the country goes about the war. If they come in poorly, the odds that a longer-than-expected war could send the country into recession will go up.

"If we're talking about a two-month war instead of a one-month war, you're going to see this economic weakness persist through April and into May," said Lehman Brothers economist Joe Abate. "The weakness is going to last as long as the war does."

Still, the economy may have one saving grace even if the war isn't over by the time Wall Street starts wearing its seersucker suit and panama, points out Salomon Smith Barney economist Mitchell Held. The Federal Reserve, which has held pat on rates as it waits to see if the geopolitical uncertainties plaguing the economy might lift, will finally get off its keister.

"You're either going to get consumer sentiment improving or you're going to get the Fed cutting rates," said Held.

A lower fed funds rate, along with the environment that would bring that about, would send bond yields lower, and with them mortgage rates. That would allow households, yet again, to refinance mortgages, helping keep consumers spending, and the economy limping along until the last shot is fired.

Fundmen unable to take investment decisions

Money managers across the world are tip-toeing around a volatile market landscape, unable to take robust investment decisions because of uncertainty about the Iraq war and its economic spillover.

A Reuters March poll of global fund managers showed on Friday that in the run up to and early days of the Iraq war investors remained uncertain and unwilling to take major risks.

US managers moved out of stocks and into bonds and cash.

Britons and other Europeans made only small moves. Japanese investors said they planned to move into US equities - but not yet.

"There is a sense that people are unwilling to take big bets anywhere and that is all part of the greater geopolitical concerns," said Jeffrey Palma, an asset allocator at UBS Warburg.

Although many fund managers have strong views - both ways - about the potential for world stock markets to end the bear rally that is now in its fourth year, the run up to the US-led war on Iraq has clouded their decisions for months.

With the actual start of the war, equity markets rallied sharply and investors moved out of safe-haven investments such as government bonds.

But the prospect of a lengthy war, with the potential of disrupting the world's fragile economy, cast another pall of uncertainty and reversed the trend.

"Most of the risk in the market is not related to economic fundamentals. It is focused on things we have difficulty in assessing," said Chris Harley, director of fixed income at Insight Investment.

The poll of 40 fund managers across the world was taken between March 18 and 27 just before and during the first week of the US-led war to topple Iraqi President Saddam Hussein. Some of the allocation decisions, however, may have been made beforehand.

US fund managers worried about taking new risks and moved money out of US stocks and into US bonds or cash.

March's numbers illustrated key themes, including the steady increase in cash holdings plus slightly more interest in emerging markets and less interest in Japan.

But there was also a shift in U.S. equity holdings down to 49.2 per cent of stock portfolios from 53.2 per cent in February.

Industry heavyweights like Deutsche Asset Management, UBS Warburg and American Express raised their allocation to US debt to 32.4 per cent from 30.2 per cent in February and 29.8 per cent in January.

In Britain, uncertainty about the long-term direction of equity markets and the short-term impact of war with Iraq left the broad picture confused.

Managers raised allocations to US stocks mildly, 49.1 per cent of portfolios from 48.7 per cent, despite data during the month showing that the US consumer - the mainstay of growth over the last couple of years - losing faith in the economy.

"There is a lot of uncertainty, you've really just got to focus on (individual) stocks," said Stephen Docherty, head of global equities at Aberdeen Asset Management.

European money managers cut their exposure to European equity markets, hung on to cash and slightly raised their US and Japanese bond holdings.

But there were no major shifts and nothing to encourage managers to make significant moves. "We are quite neutral. The US is more efficient in tackling its problems, but quite expensive, Europe is cheaper but slower," said Adrian van Tiggelen, director of European equities at ING Investment Management. Japanese institutional investors gave some hint to the future, saying they plan to move funds back to US stocks and out of euro-zone and Japanese equities.

"Once the war ends and geopolitical concerns start to fade, investors will be able to take more risks," said Akihiko Nishida, senior bond strategist at Mitsubishi Securities.

US fund managers have made some relatively dramatic moves since January, and March's numbers illustrate key themes, including the steady increase in cash holdings plus slightly more interest in emerging markets and less interest in Japan. But most remarkable," say analysts, is the sharp shift in money allocated to US stocks.

"The ultimate question on everyone's mind is whether this war will change the attractiveness of the US and you don't get the same answers tow days in a row," said Arnim Holzer, investment strategist for the global asset allocation group at Deutsche Asset Management in New York.

With money managers fixated on news headlines about the war, several strategists worried that some were making too many moves too quickly right now. Many remain convinced the US stock market is the best place to be in the longer term, given the stimulus created by the softer dollar and other factors. But even these options expect the next weeks, or months, to be shaped by more volatile moves with another earnings season around the corner and no signs that the war is near its end.

"The United States has the policy levers and they are more powerful here than anywhere else. The US will be able to grow out of this. That doesn't mean that it will be a straight line or that there won't be disappointments however," Holzar said.

In light of current jitters, many asset allocators preferred bonds to stocks, in part because bond returns have only one main driver - what central banks will do next. - Reuters

PC sales in Q3 flat, expected to pick up in Q4
Grey consumes market, industry concerned

By Our Business Correspondent

The desktop personal computer market dropped 2.3 per cent in the third quarter over the previous quarter of the current fiscal, according to the MAIT quarterly survey of PC sales trends. PC sales grossed 4.31 lakh units in the October-December quarter. With increased sales throughout the year and, with the last quarter accounting for maximum sales traditionally, the industry is expected to comfortably cross he 20 lakh mark in PC sales.

While the first three quarters of fiscal 2002-03 witnessed increased PC sales over the previous year, the market share of the branded PCs came under severe pressure. The unorganised sector made a significant dent in the market share of the branded PCs - from 50 per cent in Q1, the proportion of the locally-assembled PCs has gone upto 63 p.c. in Q3 of 2002-03.

During 2001-02, while the overall market for PCs had declined over that of 2000-01, the organised sector gained market share as some assembled players exited the PC business. Says the MAIT report, "Now, with recovery happening, several of them are back in business as current market structure facilitates easy exit and entry of the unorganised segment, while the organised sector players with long-term commitment have ended-up being at a disadvantage.

Further, the Budget did little to alleviate the problems of the organised sector as the excise duty on IT products was not brought down from the existing 16 p.c. to the recommended 8 p.c. MAIT had recommended that the excise be lowered to 8 p.c. for at least the next two years, and had claimed that this would have helped the industry to compete with the grey market. Lower excise duty would have helped graduate the players in the grey market to be organised.

In one of the earlier MAIT-IMRB Studies, the findings indicated that in FY 1999-2000 early 29 per cent of the households were willing to invest in a PC and that 64 per cent of them were willing to purchase branded PC over assembled. However, subsequent tracking studies indicated that though the preference of branded PCs was high in this segment, it ended up buying assembled PCs on account of the price differentials with the organised sector. This price difference is not only on account of evasion of excise duty and other local levies but is also due to rampant software piracy and IP infringement. The household segment accounted for 22 per cent of the overall PC sales in the First-half of 2002-03.

Commenting on the findings of the study, Vinnie Mehta, Executive Director, MAIT said, "To ensure that IT reaches grass root levels in India, there is a pressing need to bring down the prices of IT products. MAIT would continue to press for reduction in excise duty, as it is the key to eradication of the menace of the grey market. The increase in the number of imports of cell phones through the legal channel is a key indicator of the government's success in tackling the issue of grey in case of the cellular industry. The government has abolished the excise/CVD in case of the cell phones. A solution on similar lines is the need-of-the-hour for the IT industry as well."

Bush and Blair rape a rich civilization


The whole world is both outraged and anguished by the Anglo-American merciless massacre of innocent Iraqis.

The war against Iraq is immoral ,illegal, illogical, irrational, invidious, injudicious, devious, treacherous, spiteful, vengeful, arbitrary and unjust. It is a horrendous crime against humanity. You are powerful when you have power and don't use it and not when you use it. America ceases to be great the moment she ceases to be good, just and fair. An adharmic (unrighteous) war has no moral sanction, however, best Bush and Blair make it sound innocuous.

Unlike Bush and Blair who could trace their ancestry possibly back to their fathers , the Iraqis have a long civilization that stretches over 8,000 years. When Europeans were barbarians (they and the Americans still are) villages were setup in Iraq where men learnt farming, animal husbandry, house building, weaving, pottery and even making art objects by painting and sculpture. Because of its strategic geographical position, Iraq has been a vital bridge connecting the three continents of Asia, Africa and Europe and between the Indian Ocean and the Mediterranean.

Iraq is more secular than all Muslim countries and many of the so called Western countries which brook no religion other than Christianity. Tariq Aziz, the Deputy Prime Minster of Iraq, for example, is a Christian and there are many churches in Iraq, most of them set up by the invaders. There are many Jewish families who live happily and peacefully in Iraq for generations. Women are given more freedom.

Pregnant women are given six months paid leave for the first time and half paid leave for the second time.

The state does not discriminate other religions and non-Muslim festivals are holidays. The national emblem of Iraq is same as that of the US. The Eagle! I doubt whether an American or a British would allow a Muslim TV Crew to cover the destruction of Washington or London live as the broadminded Iraqis do now despite getting bombarded by the white rascals. That is the great essence of Iraqi civilization. They compartmentalize issues and extend Full hospitality to these wicked wolves (whites!)

If you see the map of West Asia you will find one continuous land mass of Iraq extending up to the Persian Gulf. Just as Kashmir is an integral part of India, Hong Kong & Taiwan that of China and Falklands of Argentina, Kuwait belongs to Iraq from ancient times. In fact, there was no separate country called Kuwait even a few hundred years before. It was an artificial creation of the British to serve their own vested interests. So, why should Saddam Hussein or the people of Iraq accept this diabolic division of their country? Which law says that the British can go all the way and claim the Malvinas, which geographically and legally belongs to Argentina while Saddam cannot take back his own land? Why this double standard ? Are these British and Americans created by a special God?


So, what is the difference between Osama bin Laden and Bush and Blair?
The Osama is a disorganized terrorist while Bush and Blair are organized terrorists. The former is a crude terrorist while the latter sophisticated terrorists. The former destroys and then claims responsibility, while the latter televise and then destroy! Osama might be speaking bitter truth in Arabic that many don't understand while Bush and Blair are telling blatant lies that everybody understands but nobody believes ! Osama is a masked terrorist while Bush and Blair are unmasked terrorists.

The barbaric action of Bush & Blair has only increased admirers for Osama. Even those who condemned Osama now feel he might be after all right. When I spoke to many hitherto pro- western students in Mumbai they felt that Osama should have scored a hat-trick in New York by smashing that vertical Idiot Box (UN Building) also along with the twin towers of WTC so that there would not have been any weapons inspection and consequently, there would be no war.

Shortly after the 1991 Gulf War a Baghdad daily had featured a cartoon showing the Sr. Bush suffering from some cardiac problems. When he went to a hospital to get operated the doctors were shocked to find that he had no heart! This time around the cartoon was that Junior Bush outscores Sr. Bush! How? When Jr. Bush went to a hospital his doctors were shocked even more to find both his heart and brain missing!

This could have angered Jr. Bush who now runs like a mad elephant. Nobody wants to hear the truth!!

Simply bluffing the world that Saddam Hussein has Weapons of Mass Destruction only made Bush and Blair BMWs-Bluff Masters of the World Let's not get carried away by the rhetorics of Bush and Blair. Eloquence is not truth. It is one week into the war and yet no weapons of mass destruction which these two bluff masters claimed ad nauseam have been found. Soon to cover up the blunder Bush and Blair will dump their own huge arsenals in Iraq and boast to the world "Eureka!" Already, there are reports swirling around that Arab students in America are bribed to get some of these WMDs written in Arabic Words with Saddam's picture embossed on these. When it comes to deception nothing to beat the British and the Americans! They will go any extent to prove Abe Lincoln wrong!

Who is liberating whom? Even those Iraqis who opposed Saddam Hussein is returning home to fight against the bloody invaders. The atrocities that the so-called coalition forces are committing in Iraq only strengthens Iraq's case for possessing WMDs. Iraq is fully justified in defending her sovereignty and territorial integrity even if it has a huge cache of WMDs. Iraqis should have actually built long range ICBMs targeted at the White House and 10 Downing Street. In that case Bush would have engaged into fruitful dialogues, extended the Most Favored Nation Status to Iraq, unrolled a Red Carpet to Saddam Hussein at the Rose Garden in the White House and called Iraq a People's Democratic Republic! And possibly Bush would have recommended to the Nobel Peace Prize Committee to bestow jointly the Nobel Prize for Peace on him (Bush) and Saddam Hussein! But Saddam Hussein cares a jot for such gestures because he is truly a brave man who does not need a white man's certificate!

Americans will begin to love humanity only after Houston and New York become the sister cities of Hiroshima and Nagasaki. Till then they won't know the human values. Only when Cuba , Mexico and Canada become nuclear weapon states Americans will behave properly! Unipolarism has made them arrogant.

Colonialism had gone. But the Whiteman's penchant for perfidy, knavery, treachery and rascality have not gone.

When Satan does not want to come to earth personally, he deputes bloodthirsty blighters like Bush and Blair to cause major destruction on mankind. If we have a fair international judiciary both Bush and Blair would soon be counting peanuts in a Hague prison. The unjust war on Iraq clearly brings out the Anglo-American duplicity, mendacity, chicanery and hypocrisy. They can't fool the world any longer.

The real terrorists in this immoral war against Iraq are in the White House and in 10 Downing Street. Both Bush and Blair should not only be impeached but also tried for genocide against the innocent people of Iraq. What crime have they committed?

Bush's barbarous crime against humanity will only make Osama's nuking of New York a justifiable necessity. When there will be more ground zeros in America the civilized world will say to the Americans : " You freelance f****rs of others peace and happiness, you deserve this and much more!" The Great Train Robbers were more humane and less avaricious than these Xenophobic b******s called Bush and Blair who are a blot on humanity.

China, Russia and France should threaten America with retaliation if it does not stop this heinous atrocity immediately. Future historians and lexicographers will use one appropriate word to define rogues, ruffians, riff-raffs, rowdies, rascals, ragamuffins, reprobates, regenerates, rattlesnakes and rapists. And that is: Americans! They are truly the modern barbarians, bullies, brigands, butchers , beasts and blighters.

Saddam Hussein may not be a Mahatma but he is not a scoundrel like Bush or Blair.Courageous leaders like him are a rare avis. What was his crime? He stoutly refused to become a poodle of Bush a la Tony Blair! The world should honor this great leader by instituting an award for bravery in his name. Also all nations which are still civilized should erect a statue in front of the UK and US Missions everywhere and name the street/road as Saddam Hussein Marg/ Plaza/ Square etc. His birthday, which falls on April 28, should be celebrated every year by the freedom loving people all over the world with enthusiasm and fervor.

If a free and fair opinion poll is conducted Saddam Hussein would beat both Bush and Blair. His admirers are swelling everyday in sharp contrast to the aversion the very name of Bush or Blair evokes.

Asia is the biggest continent with an area of nearly 44 million sq. kms occupying 29.5 % of the land mass on earth and extending several time zones. It is also the most populous continent with 3.60 billion people or 60.5 % of the total population in this planet. Yet, for want of unity among many nations, today Asia -which gave birth to maximum number of religions -remains the most exploited continent on earth. Europe and America are rich today because of the systematic and deliberate exploitation of this rich and resourceful continent.

Who are these bloody Bush and Blair to tell who should rule an Asian nation and who should not? What locus standi have they got? Just as the US has her Monroe Doctrine which prohibits non-continental (American) countries from interfering in the American affairs we should have our own Asian Doctrine that bars non Asian countries to meddle in our state of affairs. For that the Asian nations should come together and the artificially divided nations should join as one country. India, Pakistan, Bangladesh , the South and North Koreas, Kuwait-Iraq should merge into one country. Dividing other nations and making the same people to fight against each other is the passionate hobby of these Americans and Europeans. So, once countries in Asia reunite these alien invaders will have no role to play in our affairs. Like there are signs ŽBEWARE OF DOGS it is high time Asian nations put up notices BEWARE OF THE YANKEES AND EUROPEANS. The sooner they are kicked out of Asia the better it is for the Asian nations. Karma is a double-edged sword. The curses of the innocent Iraqis will come back to pay the Americans in their own coin.

The war on Iraq will only give rise to the advent of many more Osamas. The future Osamas won't be hiding in the Tora Bora Mountains in Afghanistan but will appear from Wall Street, Times Square or Pennsylvania Avenue or any where in America.

So to avoid such prospects: