Trump in China shop smashes ceramics of stock markets; Bears tame bulls with tight hug | Opinion

By Prakash Chawla: With a rage of a bull, US President Donald Trump entered the China shop destroying less of the Chinese porcelain but smashing pieces of ceramics all around the world as markets found themselves in the tight grip of bears. Bulls have since been tamed and bears of all varieties - black, brown and polar - are flexing their hug. 

Indian investors who lost lakhs of crores on Monday morning itself, can take a deep breath with a consolation that the devastation is not limited to Dalal Street and was devious enough to create a seismic impact of plus 7 on the Richter scale of the global stock markets. Analysts and wise men and women of Wall Street are describing the crash in their own ways but they all have one thing or rather one person in common: Donald Trump. Ace hedge fund manager Bill Ackman who had supported Trump at the start, has gone to the extent of warning the US President against ''economic nuclear war'' on countries all around.

So far, warnings of recession because of the ridiculous levels of tariff slapped on both friends and foes with dire consequences for most others in Europe and Asia, extending up to the Pacific have no impact on the Trump team. They are all serving ''medicine'' to the debt-burdened US economy. In fact, Trump is even prepared to take the largest economy in the world to the operation theatre for a painful surgery. 

Alas, the pain is not limited to US investors, job- seekers and consumers. It is being severely felt across the nations and the people who are losing trillions of dollars in the market. The fear of recession and job losses is not without basis. Asia began its Monday with red bleeding the markets of Japan, China and India diving upto near 8 per cent on some of the indices. Europe too showed red all over with losses of similar quantum. The US would be no different .      

All through March when the Nifty and the Sensex were seen making some kind of bottoms, hapless investors were being advised to stay calm. They were even told to buy the dips, in the large caps, good old blue chips. Investors were left with not much of a choice. Although they were trapped in one-time favourite small and mid caps, they kept pouring in some inflows at least through systematic investment plans, or SIPs.

The latest punches are now raining on the large caps including those belonging to the reputable house of the Tatas and others. Companies like Tata Motors have lost something like 60 per cent from their peaks. If your investment in such companies is destroyed to this extent, where will they find refuge? 

The present crisis is being drawn parallel to the Black Swan event of the Corona pandemic. There's a big difference. The bounce back in 2021-22 was swift and sharp. No such  possibility seems on the horizon. So, keep your calm if you have already not lost too much money!

(Prakash Chawla is a New Delhi-based independent journalist /economic analyst)