Stock markets around the world took a severe plunge on Tuesday and Latin America was no exception. Mexico’s main stock index fell by 3.7% and the peso tumbled to its lowest point since last July. Meanwhile, Argentine stocks decreased by nearly 7.5% and Brazil’s Bovespa Index recorded its largest drop since September 2001.
The trigger of Tuesday’s worldwide slump was China where it’s stock index dropped by nearly 9%. It may be possible that yesterday’s downturn was just an anomaly but China has made some serious economic inroads into Latin America. The region would certainly feel serious repercussions if China’s economy undergoes problems. Perhaps it may be time to change the old saying on the region's economic ties to the U.S. and rephrase it to “when China sneezes, Latin America catches a cold.”
Links- San Jose Mercury News, Reuters, Bloomberg, The Latin Americanist, canada.com
Image- The Age (Chinese stock traders at the end of a grueling day on Tuesday)
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