World War 3 looms? The ultimate checklist for Indian investors
Subscribe to enjoy similar stories. New Delhi: “Buy on the sound of cannons, sell on the sound of trumpets." — Nathan Mayer Rothschild 17 January 1991. Time: 2.38 am.
Eight US Army Apache helicopters flew over the Iraqi–Saudi Arabian border and bombed some Iraqi radar sites. Five minutes later, 24 US Air Force fighter jets attacked airfields in Western Iraq. At 3 am local time, 10 more stealth attack jets raced to Baghdad and began bombing Iraq’s capital.
After months of frenzied diplomacy and military buildup, the US-led coalition forces had launched Operation Desert Storm, marking the beginning of hostilities in the Gulf War of 1991—the biggest global conflict since World War II. Wall Street reacted to the momentous occasion by posting its second-biggest single-day jump ever, with the Dow Jones industrial average soaring nearly 115 points to close at 2623.51. Volumes on the New York Stock Exchange were the eighth-highest on record.
This was not an aberration. Despite being the eternal battleground between the bulls and bears, stock markets have reacted with remarkable equanimity during times of actual war. As per an oft-quoted study by LPL Research, the US stock market slipped by an average of only 5% during 20 major geopolitical events since World War II, including the Cuban Missile Crisis, John F.
Kennedy’s assassination and 9/11 terror attacks. Not just that, the market was able to recoup the losses in less than 50 days, on average. Not that this is peculiar only to the Mother Market.
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