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India, Europe and Mexico elections – how have they moved markets in 2024

The EU, Mexico and India have all had elections in 2024, with the UK, US and many more countries to come. With this bumper election year, what have the results meant so far for investors?
Conceptual image of a person voting during elections- GettyImages

Important information - This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

2024 is the ultimate election year.

Globally, more people are expected to head to the polls in 2024 than in any other year in history. Now that we’re in the middle of the year, we can look at the outcome of elections that have happened so far and their impact on financial markets.

India, the EU and Mexico’s election results are worth looking at closely, as all had surprising results that impacted their domestic economies.

This article isn’t personal advice. Investments can rise and fall in value, so you could get back less than you invest. Past performance is not a guide to the future. If you’re not sure if an investment is right for you, ask for financial advice.

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India – Modi wins but without a majority

India has the world’s largest number of voters and ahead of their ­­election, Narendra Modi’s BJP party was expected to win another landslide vote after a decade in power.

A party needs to win 272 seats to form a government in India. After voting closed on 1 June, the exit polls by Indian media organisations, suggested his BJP party could win between 350 - 380 seats, even more than the 303 seats that it won in the 2019 election.

When the official result was announced on 4 June, Modi didn’t get the expected landslide election victory, and instead, the BJP party won 240 seats, 32 seats short of a majority.

The disparity between the expected result and the actual result caused extreme volatility in the Indian stock index, and the Indian stock market had a wild ride over the course of the election results.

After the exit poll, the Nifty 50 index surged 4%, before falling more than 8% when the result was announced on 4 June. The index recovered once Modi formed a government, and ahead of the official swearing in ceremony, the Nifty 50 index hit a fresh record high.

While the Indian rupee had lost value versus the US dollar (USD) over the past year, it was one of the most resilient currencies in the Asian FX space. The rupee lost some 1% versus the USD in the last 12 months – this compares with a 4.6% loss for the Thai Baht, an 8.6% loss for the Indonesian Rupiah and a 10% loss for the Japanese yen.

In the week when the Indian election results were announced, the usually resilient rupee suffered versus the USD. The Rupee slumped to a near record low versus the USD in the aftermath of this election, and didn’t stage a recovery like the Nifty 50 index.

Volatility in US dollar/ Indian rupee options also surged to the highest level in a year. Unexpected election results can have big impacts on asset prices, and trading around elections isn’t for the faint-hearted.

Past performance isn’t a guide to future returns.
Source: Bloomberg, 09/06/24.

Currency vs. US Dollar

06/06/2019 - 06/06/2020

06/06/2020 - 06/06/2021

06/06/2021- 06/06/2022

06/06/2022- 06/06/2023

06/06/2023 - 06/06/2024

Indian rupee






Thai baht






Japanese yen






Indonesian rupiah






British pound






Past performance isn't a guide to future returns.
Source: Bloomberg, 06/06/2024.

This begs the question of why the Indian stock market bounced back, yet the currency market didn’t.

Currencies tend to falter at the sign of political instability. This happened to the pound after the 2016 referendum to leave the EU. In India, the market had expected a clear win for Modi. While he’s a controversial figure in politics, Modi has made some big changes in India in recent years.

He promised to make India the third largest economy by 2027, upgrade India’s infrastructure and help boost its digital connectivity. This year’s election and a big majority for the BJP was supposed to mark the next phase of his time as prime minister. He had planned big reforms for agriculture and the labour market, which were part of his plans to quickly grow India’s economy.

Modi’s diminished stature casts doubt on these reforms. He has an uphill battle to unify the strengthened opposition to support his economic reforms, as India struggles with a poverty rate of more than 12%.

India’s economic plans have been thrown into confusion with this election result, which could have a long-term impact on the currency.

Europe – success for the right wing

The European elections that took place in the first week of June, also delivered a shock result.

The National Rally party in France, headed by right wing Marine Le Pen, won more than 30% of the vote, compared to President Macron’s Renaissance party that won 15% of the vote.

In an unexpected twist, the French president then announced a snap parliamentary election.

This news weighed on the euro, and EUR/USD sunk to a one-month low after the election news. EUR/GBP fell further, and reached its lowest level since August 2022 on the news.

Currency vs Euro

06/06/2019 - 06/06/2020

06/06/2020 - 06/06/2021

06/06/2021- 06/06/2022

06/06/2022- 06/06/2023

06/06/2023 - 06/06/2024

US dollar






British pound






Past performance isn't a guide to future returns.
Source: Bloomberg, 06/06/2024.

While gains for the far-right parties in the European elections were not unexpected, the domestic political turmoil they’ve triggered in France was the unexpected element that weighed on the euro.

Mexico – a first female president

Mexican elections were also a trigger for volatility this year.

The Morena Party, headed by the first female president, Claudia Sheinbaum, won the election with an unexpected landslide victory on 2 June.

The party was expected to win and had been leading the polls with an approximate 20-point lead ahead of polling day. While expectations were high for Sheinbaum and the Morena Party, they exceeded them and won a supermajority, with 60% of the seats.

Critics argue that a super majority of this size poses a grave threat to Mexico, since the Morena party now controls enough seats to amend Mexico’s constitution. This could lead to more political meddling in the judiciary, the police and the energy sector.

Morena’s a left-wing party, and some commentators are also worried about the fiscal position of the country after the party promised more generous retirement benefits. There’s also fears about the future of US and Mexico relations if Sheinbaum and her government dramatically change the constitution.

These fears were played out in Mexico’s financial markets.

The Mexican peso lost 9% versus the USD in the aftermath of the election result. The peso has recovered some of its losses, but it’s still at its lowest level versus the USD since 2022.

The Bolsa Mexicana, Mexico’s main stock exchange, massively underperformed global indices in the days after the election. It initially fell more than 7% but managed to recoup some losses. Even so, on a currency adjusted basis, the Mexican stock exchange was down more than 11% in the five days after the election.

Past performance isn’t a guide to future returns.
Source: Bloomberg, 06/06/2024.

Should you trust the polls?

The outcome of the Indian and the Mexican elections are worth noting for two key reasons.

Firstly, you can’t always fully trust the polls. They can get things wrong, which can have big implications for financial markets.

Secondly, stock markets might bounce back after an election shock, since they can be more dependent on global factors. However, a weak currency can also drag down their returns for foreign investors and there are no guarantees.

This is a major year for elections, and there’s still plenty of potential risks to come, including elections for the UK and the US. The results of votes in Mexico and India are a warning to all investors to take political risk seriously and to keep the long term in focus.

Kathleen Brooks is the Founder of Minerva Analysis, a market analysis company. Hargreaves Lansdown may not share the views of the author.

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Written by
Kathleen Brooks
Kathleen Brooks
Founder of Minerva Analysis

Kathleen Brooks is the Founder of Minerva Analysis, a market analysis company. An industry expert with over 10-years experience working for retail trading providers in the City of London, she is routinely quoted by the world's top financial press including the Financial Times and Wall Street Journal.

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Article history
Published: 18th June 2024