Sept. 9 (UPI) -- Financial markets dealt Argentina a harsh blow after President Javier Milei's coalition suffered a major defeat in midterm elections in Buenos Aires province, the country's largest district.
The market reaction to Milei's electoral setback was immediate: the peso fell about 5%, the S&P Merval index dropped more than 10% and several ADRs -- shares of Argentine companies traded in New York -- lost as much as 20% during the day Monday.
The "country risk" -- which measures the premium investors demand to hold its debt over U.S. Treasury bonds -- jumped above 1,000 basis points for the first time since Oct. 24.
The government's electoral setback at the hands of the opposition -- 47% for Peronism versus 34% for the ruling coalition -- was read as a rejection of President Javier Milei's shock program that includes spending cuts, deregulation and market openings, and as a signal the administration will face greater challenges in passing reforms and sustaining its economic plan.
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