Perhaps the biggest trigger for the global bearish phase is the appreciation of the yen-and if Indian markets got hit badly it's also courtesy their new-found appetite for Japanese portfolio investment. According to estimates, Japanese investors would have pumped in roughly $1.3-1.5 billion (Rs 5,720-6,600 crore) into domestic stocks in the past 15-18 months. "Investors squaring off their trades due to the strengthening of yen has been the reason for the fall in equities across markets," says Rushabh Sheth, Managing Director, Karma Capital. "The Indian market is no more isolated and any global event will have an impact on our market," he adds for good measure. Indeed, a host of big global investors resorted to squaring off yen carry-trade (borrowing in yen and investing in other currencies, mainly the dollar) in the past fortnight. This is because the till-recently weakening yen has suddenly strengthened versus the dollar. In India, foreign institutional investors (FIIs) in four sessions till March 1 were net sellers to the tune of $0.7 billion in the cash segment and $0.27 billion in index futures. "Apart from the impact of collateral damage, tightening of the rates in Europe, news of Chinese regulators tightening their grip over companies on issue of price rigging, tightening of rates in the mortgage market in the us and announcement of ex-chief of Federal Reserve, Alan Greenspan, of a possible recession in the us have led to jitters among global investors," says Nilesh Shah, President, Kotak Asset Management Company. Adds Rajesh Boghani, Retail Dealer, Parag Parikh Financial Advisory: "The market has broken its support level of 12,800 and the next resistance level is 10,880-11,000. And given the current market environment touching those levels looks possible." "Due to short-term concerns (rising interest rates and inflation), post-correction, I see the Sensex consolidating more in 'U' manner than in a 'V' manner like before. It will take at least six months for the Sensex to touch a new high; by the year-end it will hit 15,000," says Shah.

The ongoing correction may have coincided with the Finance Minister's Union Budgetary proposals, but P. Chidambaram might have just been a victim of bad timing (the Chinese crash took place a day before the announcement of Budget 2007). The good news, though, is that most traders feel that the India story is still intact. "Being among the fastest growing economy and markets, it is not possible for global investors not to be invested in the Indian market," says Boghani. This time around, however, the turnaround might just take a wee bit longer-around six months is the consensus on Dalal Street.

Primary Bloodbath
Crackdown on a recently-listed stock makes IPO investors panic.

-Mahesh Nayak

Taxiing As One
Is one state-owned airline better than two?

One integrated airline may well work better than two that are inefficient. That's clearly the thinking in the civil aviation ministry. And global consultant Accenture concurs. It is in the process of evaluating the two existing state-owned carriers, Air India and Indian, in a bid to merge them into a single company with the government of India having full control over the new entity. "The two will be merged into a new company, which will have to be registered under the Companies Act. The company will have a new board, comprising a new Chairman & Managing Director, three Functional Directors heading the personnnel, finance and commercial divisions, followed by six Executive Directors who will be heading six new divisions," a senior official in the ministry of civil aviation told BT.

The merged company is expected to have a fleet-strength of 112 aircraft initially and an employee base of 30,374, which would help improve the employee to aircraft ratio from the existing 305 to 196. According to Civil Aviation Minister Praful Patel, "the merged entity, with one name, one logo, one code and merged financials is expected to be in place within the coming 16 weeks."

At the end of the year three, the merged airline is expected to have saved around Rs 820 crore in costs-Rs 410 crore would have accrued from synergies driven by network integration, and another Rs 410 crore from synergies driven by consolidation and better negotiating power. The cost of the integration exercise is estimated at Rs 200 crore. Clearly, on paper, a unified airline appears a more profitable one-Rs 620 crore of profits as against AI's and Indian's current bottom line of Rs 80 crore and Rs 150 crore, respectively.

-Amit Mukherjee

So what if India's cricketers don't come back with the World Cup-the event has at least given the country's dream merchants an opportunity to do some world-class work. Global sportswear brand Nike, which began advertising its products with cricket only a year ago, has succeeded in capturing the craze and chaos that go along with the game in India with a two-minute commercial made by JWT that was launched last fortnight. Already on 20 television channels, the ad will soon be shown in multiplexes too. "The advertisement is a tribute to the passion that Indians have for the game," says Sanjay Gangopadhyay, Nike's Marketing Director.

Moving away from the usual sweet-neighbourhood-kids-playing-cricket formula, this advertisement shows cricket for what it is for most Indians. "It's a hard, tough game played by 15-to-17-year olds who can swing a mean ball or drive a bludgeoning bat in the gullies of India. These are the kind of guys who represent the passion for the game in India. And these are the kind of guys we show in the commercial," explains Gangopadhyay. A tough game played with equal meanness and roughness, the commercial's massive set took a month to set up and another three-and-a-half days to shoot, at ND Studios in Karjat on the outskirts of Mumbai. The larger-than-life regard for the game is captured in all its grandeur with bats being flayed and balls being sprayed on top of buses in a typical Indian traffic jam. "The next-door boy in the commercial is not a cute-looking boy but a cricket buff who can jump out of the window and play the game whenever given the chance. I did not want good-looking models. I wanted tough-looking young Indians who have the dare devilry to play in the crowded streets of the country," says Agnello Dias, Senior Vice President and Executive Creative Director, JWT. And where did the high-tempo song come from? "It is an old Konkani tune with changed lyrics to depict the gutsy game for what it is," adds Dias. So what was the most difficult job here? "The shot where the batsman gets hit (in the box, in cricket lingo) was the one which required the maximum number of retakes," quips Agnello. For a company that believes in just doing it, Nike surely has gotten it right this time. Now will the Indian team get duly inspired?

-Pallavi Srivastava