Reference Auto

The Japan earthquake should come as a warning not only to countries using nuclear power to generate electricity, but also to nations that are racing against time to stockpile their nuclear weapons.

The latest figures (which are not corroborated though) show that Russia has 12,000 nuclear warheads and is followed by the US at 9,600, France has 300, China 250, Britain 200, India 80, Pakistan 90 and North Korea 10.

The earthquake in Japan and the tsunami that followed devastated towns and killed scores of people. It also created another (a new) kind of devastation: leakage at nuclear power plants.

The media went all out to highlight this danger and countries using nuclear power have ordered a review of the safety of their plants.

Japanese authorities were grappling to plug the leak at the reactors of the Fukushima Daiichi nuclear plant. The earthquake triggered a failure of the cooling system, which led to radiation leak.

After the Japan incident, India is treading cautiously, ordering inspection of some of its reactors. In the case of India, only three per cent of electricity is generated by nuclear power.

There is a larger threat though: countries that have stockpiled nuclear weapons face an imminent danger in case a Japan-type disaster strikes.

We are not sure how much countries spend on storage. But the US, the UK and France have substantial funds and adhere to the highest safety standards, storing these devastating weapons in earthquake-resistant chambers.

So, if a powerful earthquake of the magnitude nine on the Richter scale jolts the Nevada desert, where the US is believed to have stored substantial amounts of its nuclear weapons, what will the damage be like?

Negligible, as the US is believed to follow high standards of safety so far as nuclear weapons are concerned.

But what about countries such as China, Russia, India, Pakistan and North Korea? We are clueless on how storage is done in these countries. And what about Iran, which falls in a highly seismic zone?

It is unlikely that Iran is spending substantially on storage as it struggles to put nuclear weapons in place. And, a poverty-stricken North Korea is probably zero-compliant so far as safety of nuclear weapons is concerned.

Therefore, a similar earthquake and tsunami in Pyongyang will deal a debilitating blow not only to North Korea but also in neighbouring South Korea, Japan and parts of China.

Also, India is ramping up its nuclear presence. It has already inked pacts with Russia and France and the US is waiting in the wings to clinch the biggest contracts in the sector after the 123 nuclear deal paved the way for India to enter nuclear commerce with certain countries.

Neighbouring Pakistan has increased its stockpile manifold in the last five years and it is strongly believed that it has more nuclear warheads than India (Pakistan has 100 nuclear warheads against 60-90 by India, according to estimates).

The Japan quake may have taken a toll on the nuclear power industry and countries around the world would give it a second thought, at least in the short term, before setting up nuclear power projects.

But there are lessons to be learnt for countries with nuclear weapons also. They need to hike their spending in not only piling up their weapons but also ensure that nuclear storage is foolproof and resistant to earthquakes along with other types of catastrophe: otherwise the world could face a nuclear disaster even without a nuclear war.

The stock markets just seem to be getting no proper trigger to go on an upward journey, and this time, Japan’s severe earthquake and tsunami are likely to give another jolt to India’s bourses, at least in the short term.

Japan is a country that has always stood up to devastations like high-magnitude earthquakes. But this time, the tsunami that followed devastated the North East of Japan, leading to explosions in nuclear plants, which are still to be doused.

Though the areas around the nuclear plants (up to 30 km radius) have been evacuated, there are fears that the situation could escalate. All these developments are surely going to put Japan into recession, at least in the short to medium term.

Meanwhile, the Benchmark index, the Sensex, fell for the second week, ending almost one per cent (153 points) lower last Friday.

The Sensex slid 1.7% or 312.36 points at 18,174.09 points during the week and the 50-share NSE Nifty also tanked 1.7% or 93.3 points to close at 5,445.45.

Some key indices were also down. The BSE Capital Goods Index fell 3% and Metal Index was down 2.8%. Banking, Auto and IT indices also fell 1-2%. Only Oil and Gas Index rose (by 1%).

Among major stocks, BPCL, Tata Steel, Bhel, State Bank and TCS slid 5-6% while Axis Bank, Maruti, L and T, Sterlite, HUL, Cipla and HDFC were down 3-4.5%.

The Nifty Junior and BSE Small-cap indices also fell 1%. CNX Mid-cap Index was down marginally by 0.6%. But Tata Coffee surged 50% owing to rise in coffee prices in global markets. Oswal Chemical followed suit, rising 36%. There was heavy selling in metal, technology, IT, power, and consumer goods products.

Among Asian peers, the Japanese Nikkei fell 1.72 per cent at 10,254.40 points after the earthquake hit just before closing hours last Friday. Hong Kong’s Hang Seng shed 1.55 per cent at 23,249.80 points and China’s Shanghai Composite index ended 0.79 per cent lower at 2,933.80 points.

The stock markets will remain subdued for quite some time now. The Budget had somewhat provided a trigger but the bourses were let down by the crisis in Egypt that infected parts of the Middle East, including Libya and Bahrain, triggering fears of flaring oil prices.

Now the Japan quake has come as an added dampener and could keep the bourses subdued for quite a while. Also, in the near term, there are unlikely to be any triggers to spur the markets.

So, the bourses could slide in the short term at least, providing an opportunity for investors to cash in on the gloom and pick up some hot stocks at rock-bottom prices.