Market Analysis by Quasar Elizundia, Expert Research Strategist at Pepperstone
– October 21, 2024 –
“The Mexican Stock Exchange (BMV) failed to maintain the positive momentum from Friday, when the S&P/BMV IPC index closed with a 1.07% rise, driven by the industrials, consumer goods, and basic consumer products sectors. Today, the Mexican market is under pressure, falling by approximately half a percentage point, impacted by profit-taking globally and the caution of investors amid persistent uncertainty.
Despite this correction, long-term prospects for the Mexican stock market could strengthen due to Mexico’s growing attractiveness as a strategic destination for foreign investmentparticularly from Chinawhich sees the country as a key pillar in its manufacturing and logistics diversification plans. This investment flow could generate a positive boost for Mexican stocks.
However, political uncertainty in the United States remains a crucial factor influencing the Mexican market. With the upcoming presidential electionsinvestors remain cautious about the potential return of Donald Trumpwhich could escalate trade tensions and result in aggressive tariffsespecially in sectors like the automotive industry and other key export industries. It is worth noting that this would likely nullify any benefits Chinese investments might bring to the Mexican stock market.
On the other hand, a Kamala Harris victory could stabilize trade relations between Mexico and the U.S., reducing tariff risks and fostering a more favorable investment climate. This scenario could drive a recovery in Mexican assets in the medium to long term.
The future performance of the Mexican Stock Exchange will largely depend on how political and trade risks evolve globally. Volatility could increase as the U.S. elections approach, prompting investors to adjust their strategies in an environment of high uncertainty.”
- Analysis by Quasar ElizundiaExpert Research Strategist – Pepperstone
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