Business sentiment takes a hit

By Our Special Correspondent

NEW DELHI, SEPT. 12. The Indian industry feels that the complete devastation of the World Trade Center (WTC) will definitely affect business sentiment in the country. Stock markets are also due to slide but this is natural and the bourses should gradually recover.

Since the financial nerve centre in New York was the core of the attack, there could be an impact on portfolio investments from the U.S. The impact on certain industry sectors including call centres catering to U.S. customers, the tourism and hospitality sectors, insurance, especially those with U.S. joint ventures.

``Indian stock markets have fairly large portfolio investments from overseas, particularly from U.S. funds. Major foreign institutional investors such as Lehman Brothers and Merrill Lynch and many more had their headquarters in the WTC and may need some time to re-asses their losses,'' observed Dr. Amit Mitra, Secretary General of the Federation of Indian Chambers of Commerce and Industry (FICCI).

The Confederation of Indian Industry (CII) President, Mr. Sanjiv Goenka, also expressed concern over the damage suffered by many U.S. companies such as Morgan Stanley. But both Mr. Goenka and Dr. Mitra reposed faith in the ability of the U.S. to stabilise its economy and bounce back from the attack.

The analysis offered by the Associated Chamber of Commerce and Industry was more sombre. The loss of human beings and material would have a significant impact on the U.S. economy which is already affected by a slowdown. ``As the world's largest and most powerful economy, it is bound to have a serious effect on the global economy,'' said the Assocham chief, Mr. Raghu Mody. But he also added an optimistic footnote. ``However, we believe that economic repercussions could be temporary in nature as the U.S. would also not like to neglect the economy for more pressing security concerns.''

Although central industry associations had varying observations to make on the impact of U.S. strikes on the economy, they were united in expressing their condolences to the affected people. In a letter to the U.S. Ambassador, Mr. Robert Blackwell, the CII expressed deep sorrow and grief on behalf of its member corporates. ``These were terrible acts against the U.S., the people of America and all democratic peace loving people of the world,'' noted the letter. The FICCI, the Assocham and the Federation of Indian Export Organisations (FIEO) also sent their condolences to those affected by the attack.

The sentiments of the American industry were best encapsulated by the visiting Chairman of the U.S. Chamber of Commerce, Mr. Steve Van Andel. ``The spirit of free enterprise does not live in a building. Free enterprise is in the hearts and minds of millions of people. Its power to advance the cause of humanity is stronger and more enduring than any other attack,'' he told industry representatives at a seminar here today.

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Section  : Business
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