As Indian planes went down over Kargil, the bourses started hiccuping badly. Market players were unnerved by the sudden turn in sentiments. Says Sandeep Ghate, director, Securex Investments: "On several occasions in the past, the market in a free-flowing bull run has been stymied by the news of conflict on the border." The market encountered some unbelievable battering, even though the manner of its crash indicated short-sellers were pretty much absent. On May 27, the bse Sensex crashed by more than 125 points in the last half-hour of trading. On May 28, the Sensex closed at 3773 points, with a net loss of 233 points over the close of the previous week.
But the story changed the week after. For each 50-plus fall in Sensex, the markets bounced back. Says Amit Mitra, secretary-general, ficci: "Minor border skirmishes have been on for years and have had little impact on the economy. Markets plummeting on the first day was more because of panic, as was clear from their recovery the next day. The economy is stable and in no danger of collapsing." Indeed, it was clear last weekend that the markets were getting on an even keel, with the Sensex having recovered by over 100 points.