Stocks and currencies plunged in both countries as investors weigh what it could mean for growth.
Stocks and currencies plunged in both countries as India Prime Minister Narendra Modi 's party lost its parliamentary stronghold and"Sheinbaum's victory was priced in but a near-super majority was not while in India a very large Modi victory was priced in rather than a modest majority," according to aIn Mexico , investors fear "the ruling party will pass constitutional reforms without any checks from the opposition leading to a less business-friendly environment,"...
In India, Modi will have a "weakened mandate and that will make the passage of contentious economic reforms more difficult," according to aThe Sensex — an India index not unlike the American Dow — plunged more than 5.7% today in its worst daily showing since May 2020, though that was after a nearly 4% jump a day earlier.
The S&P/BMV IPC — an index that tracks major Mexican stocks — fell by 6.1% on Monday in its worst decline since the pandemic crash.In Mexico, Sheinbaum is expected to maintain the course set by her predecessor and ally, Andrés Manuel López Obrador. "S&P Global Ratings doesn't believe that the new administration is likely to materially change the country's fiscal, monetary, or trade policies," and Sheinbaum will be under pressure to grow an economy that increased by only 3.1% in 2023, the ratings agency said today in a report.
Meanwhile, Modi will still remain in power as head of a stable coalition, with Capital Economics saying that its broader embrace "of the value of economic reforms" could still translate to growth at 6-7%.Share on linkedin
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