Scores are killed in coordinated Mumbai attacks Upscale hotels, train station targeted; reports of hostages being taken

SAN FRANCISCO (MarketWatch) -- A series of coordinated bomb and gun attacks on Wednesday night in Mumbai, India's financial capital, have claimed dozens of lives and sown confusion as gunmen were reported holding foreigners hostage at hotels.

Local news organizations reported at least 80 people were killed and 250 injured in the attacks, which occurred in seven locations including two luxury hotels and one of the city's main railway stations.

CNN reported that gunmen are holed up in the city's swanky Taj Mahal hotel and Oberoi hotel, and are locked into gun battles with police.

Some 15 foreign hostages were being held at the Taj Mahal, the Wall Street Journal reported. Half of them had U.S. or British passports, according to CNN.

There have been five shootouts and two grenade attacks, according to the news station's report. Additional attacks were reported at Cama Hospital, CNN reported.
Evacuations
The attacks appear to be centered on locations popular with foreign visitors, while most of the injured are policemen. One attacker is believed to be holed up in the railway station, where thousands have been evacuated.

An online report by the Wall Street Journal quoted Mumbai police commissioner A.N. Roy as saying the police are treating the attackers as terrorists who "opened fire indiscriminately."
The Journal, citing Times Now television, reported that two gunmen who entered the Taj hotel were seeking guests with British or American passports.

In addition, gunshots were fired at the Leopold Restaurant, which is popular with foreign visitors, according to reports.

Mumbai was the site of a large-scale terrorist attack in 2006, when seven bomb blasts rocked the Mumbai Suburban Railway, killing 200 people.

Wednesday's attacks come after a series of similar incidents attributed to Islamist terrorists in other cities in India, including New Delhi.

'You don't feel safe'
Nick Chamie, head of emerging markets research at RBC Capital Markets, said that although India is somewhat used to attacks, any rise in political instability could further weigh on its market and economy.
"Generally, politics have never been a factor of strength for India. But that would add to the headwinds that the Indian market and the economy will face, that's for sure," Chamie said. "With the elections not due until next year, there's already some degree of paralysis about the economy right now."

India's sensitive index, or Sensex, rallied Wednesday, gaining 3.8% to 9,026.72. But the benchmark has lost about half its value so far this year, as investors pulled their money out of emerging markets around the globe.

Rob Lutts, the chief investment officer of Cabot Money Management, a Salem, Mass.-based independent wealth management firm, said that in order to get money flowing back to India, investors need to feel the country is a safe place to invest, he said. A spate of terror attacks show that it is not.

"Security is lacking, infrastructure is lacking," Lutts said. "The way to monitor and prevent these [attacks] is not there."

To be sure, Lutts said the market's reaction to the latest round of attacks will likely be limited. As the global credit crisis and economic downturn takes its toll on emerging markets, negative developments to some degree are already priced into current levels.

"When bad news occurs when valuations are already so low, it doesn't have much of an impact," he said.

In the longer term, India needs to improve conditions for capital investment to expand wealth and inspire more confidence in projects in the country, he said, adding, "I do believe that will happen over time" as the global recession wanes.
But for now, he said, "You don't feel safe there, and your capital doesn't feel safe, either."



Source: marketwatch.com