Hindustan Times ST (Jaipur) - - Nation - UDAYAN MUKHER­JEE

The bull run, which be­gan in 2013, is on its deathbed. Af­ter five years of run­ning on fumes of hope and bat­tling reck­less pol­icy mis­ad­ven­tures, the bull lies ex­hausted. It may have climbed one wall of worry too many. And now, the bear re­turns — its foot­prints all over the trad­ing screen in the last few weeks. The Nifty has fallen only 13% from its high­est level this year, not tech­ni­cally qual­i­fy­ing for a bear mar­ket yet, but there can be no doubt that the larger uni­verse of stocks has slipped into the grip of the bear. The NSE mid­cap in­dex is down 26% from the highs, the small cap in­dex down 32%. A very large num­ber of stocks are trad­ing at their 52 week lows, with more join­ing the list ev­ery pass­ing day. The mood on Dalal Street is fu­ne­real. The swag­ger is gone, re­placed by the un­mis­tak­able stench of fear. You know a bear mar­ket when you see one. It is here.

The govern­ment, at such times, usu­ally shirks re­spon­si­bil­ity by point­ing out that we are not alone in our mis­ery. But that is true of all mar­ket regimes — even bull mar­kets are hardly unique to In­dia. We rise as one, and fall as one. From the highs this year, the Shang­hai in­dex in China is down 28%, the Hang Seng in Hong Kong down 25% and Kospi in Korea down 18%. But far from com­fort­ing us, it should scare us even more.

This is look­ing omi­nously like an emerg­ing mar­ket (EM) bear phase, which spells big trou­ble for us at a time when our own macro sta­bil­ity is fast spin­ning out of con­trol. When your own house is on fire, you can hardly de­rive so­lace from the fact that the en­tire neigh­bour­hood is as well.

The por­tents have been dire for some time. But some­how the mar­kets stayed afloat in the naïve be­lief that our eco­nomic masters were in con­trol of the sit­u­a­tion. That has changed. The RBI, in its re­cent mone­tary pol­icy, all but told the mar­ket that it was not pre­pared to de­fend the ru­pee. An open in­vi­ta­tion to ru­pee bears and a big mis­take. If the ru­pee goes into free fall, so


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