INSUBCONTINENT EXCLUSIVE:
PM Narendra Modi's Bharatiya Janata Party established an even bigger mandate than it won in 2014India and Australia have been islands of
resilience in Asia this month, eking out positive returns as trade tensions re-ignited between the United States and China.The SP BSE
Sensex Index and SP/ASX 200 Index are the best-performing benchmarks in the region since United States President Donald Trump's Twitter
broadside rocked investors, according to data compiled by Bloomberg
They have gained about 2% each since May 3, versus a more than 5% slump in the MSCI Asia Pacific.Both countries' elections have helped
divert investor attention, however briefly, from the negative trade headlines that transfixed the rest of the market.In India, Prime
Minister Narendra Modi's Bharatiya Janata Party swept to victory, establishing an even bigger mandate than it won in 2014
Stocks closed at a fresh record high Monday.Meanwhile Prime Minister Scott Morrison led his conservative government to a surprise victory
earlier in May, fending off a challenge from the left-leaning Labor opposition amid a slowing economy and persistent concerns about the
Aussie shares traded just below their highest since 2007 on Tuesday.Still, while PM Modi's election win promises five more years of
governmental continuity, some analysts are already suggesting investors should head for the exits."There is little to sustain the current
rally and the market will very quickly worry about 'What next"' Bank of America Merrill Lynch analysts including Sanjay Mookim said in a
"Unlike 2014, this is more relief and not change
Near-term market moves will remain linked to emerging-market flows, the trade war outcome and moves in the United States dollar."Investors
will quickly return to concerns over slowing consumption, a brewing non-bank finance company crisis, as well as a combination of weak
corporate earnings and expensive valuations, the analysts said.As for those markets that have been hardest hit this month, including China
and Hong Kong, there's still room for more downside
South Korea's Kospi is on the verge of losing its year-to-date gains
Bloomberg economists Dan Hanson and Tom Orlik have mapped out a worst-case scenario for global markets -- if tariffs expand to cover all
United States -China trade and markets slump in response, global GDP will take a $600 billion hit in 2021, the year of peak impact.
