International News 07/06
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The Indian stock market has experienced a significant decline in value following the election of Prime Minister Narendra Modi.
Indian stocks experienced a significant decline on Tuesday due to the general election vote-counting trends, which indicated that Prime Minister Narendra Modi's alliance is unlikely to secure a majority as predicted by exit polls. With only half of the votes counted, it appears that the Bharatiya Janata Party (BJP) may require allies in the National Democratic Alliance (NDA) to form a government. The uncertainty over the formation of the government raises concerns about future economic policies, particularly regarding investment-led growth, a key focus of the Modi administration. India's economy grew by 8.2% in the financial year ending March 2024. The decline in stock indices, including the NSE Nifty 50 and the S&P BSE Sensex, indicates market concerns over the ability of the BJP coalition to deliver on economic development, especially on infrastructure projects.
Tesla's sales of electric cars manufactured in China declined once more in May.Tesla's sales of electric cars in China declined by 6.6% in May compared to the same period last year, marking the second consecutive month of year-on-year decline. This follows an 18% drop in April, which reversed a small gain in March. In response to declining demand, Tesla has reduced production of the Model Y at its Shanghai plant by a double-digit percentage since March. However, shipments of the Model 3 and Model Y vehicles manufactured in China did see a 16.7% increase from April. In contrast, Chinese competitor BYD reported a 38.2% year-on-year increase in sales, with 330,488 passenger vehicles sold in May. Despite the challenges facing Tesla in China, BYD's electric vehicles and plug-in hybrids, including the Dynasty and Ocean series, continue to gain market share.
Indonesia's neighbours' foreign exchange reserves have reached a four-year low.
South Korea's foreign exchange reserves have decreased for the second consecutive month, reaching their lowest level in almost four years. The Bank of Korea has reported that foreign exchange reserves were at $412.83 billion at the end of May, down by $430 million from the previous month. This decline has been attributed to the central bank's use of foreign exchange swap facilities with pension funds and a decrease in financial institutions' foreign exchange deposits. In April, foreign exchange reserves experienced the largest decline in 19 months due to government intervention to curb the weakening won. The South Korean won has continued to weaken against the dollar for three consecutive months, with a 0.2% depreciation in May. While this has supported export activity, it has also led to increased import prices. South Korea currently holds the ninth largest amount of foreign exchange reserves globally.