In a surprise move, Brazil's newly appointed speaker of the parliament has annulled the parliament's move to impeach President Dilma Rousseff:
http://www.nytimes.com/2016/05/10/world/americas/brazil-dilma-rousseff.html
No wonder India's stock markets surged today. Global investors had been counting on Dilma's left-wing govt to fall over corruption charges and violation of fiscal commitments, hoping that a new economically reformist govt would replace it. Now that this has failed to materialize, investors are fleeing Brazil's markets to safer alternatives, out of which India looks most attractive. Indian analysts are spinning it as renewed confidence in India's economy, but you have to remember that the competition for investment capital is a zero-sum game, where somebody's loss is our gain. Brazil has been seen as the next big economic opportunity, with its govt on the way out, but now that this isn't happening, India may reap the benefit of renewed attention from global markets.
1 comment:
Dilma Rousseff has been impeached. Will this affect India's stock rally? Only time will tell. Meanwhile time is running out for Modi to kick-start big reforms.
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