Mumbai Attacks Will Dent India Sentiment: Analyst

The terrorist attacks in Mumbai will further damage investor sentiment in India from an already fragile position, Simon Godfrey, investment specialist for Asian equities from Fortis Investments, told CNBC Thursday.

"The sentiment in India is likely to be impacted, we expect when the market does re-open for the market to open quite sharply down … tension will remain high from these tragic events," Godfrey told "Worldwide Exchange."

Indian authorities closed stock, bond and foreign exchange markets, as well as the central bank, following the attacks in the financial capital. It is not known when they will reopen. The interbank lending auctions will continue as normal.

"Investment sentiment in India was already actually deteriorating quite rapidly … we are seeing a lot of negative news flow in India already," Godfrey added.

(Watch the full interview with Simon Godfrey above).

India's Risk Premium to Rise

India's risk premium will rise and any potential stock rallies could be curtailed, but the markets will move on from the current attacks in Mumbai, Andy Hartwill, market strategist from Quasar told CNBC.

"The human tragedy will weigh on markets for quite some time … locally the risk premium will rise, that's for sure," Hartwill told "Worldwide Exchange."

"It will take the edge off any rallies that might otherwise have been there," he added.

The Indian consumer could also take a knock from these events, which is a concern, according to Hartwill. Many market participants hope Indian consumers will provide a global growth engine in the future, he pointed out.

Financial markets will discount for the attacks and look beyond them because "it's their job to discount and to try to look through that," Hartwill said.

(Watch the full interview with Andy Hartwillabove).

Contact Asia News


    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Asia Video

  • Medha Samant, investment Director, Asian Equities at Fidelity Worldwide Investment, is positive about the state of China's re-balancing act and explains where the firm is focusing on.

  • The decision to roll out capital expenditures and shun "big bang reforms" indicates a "middle of the road" annual budget for India, says Parmod Gubbi, director of Institutional Sales at Ambit Capital.

  • While the S6's curve screen sets it apart from its rivals, "incremental improvements" may not be enough to wrestle market share from Apple's iPhone 6, says Kiranjeet Kaur, senior market analyst at IDC Asia Pacific.