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NDP surge gives traders a jolt

The prospect that the New Democratic Party might gain more seats in today’s federal election could cause a flutter in the market as traders seek to buffer themselves from political uncertainty.

The prospect that the New Democratic Party might gain more seats in today’s federal election could cause a flutter in the market as traders seek to buffer themselves from political uncertainty.

“This isn’t something the market has been expecting,” said John Kurgan, senior markets strategist at Lind-Waldock.

Prime Minister Stephen Harper has delivered a dire message about what might happen under the NDP led by Jack Layton, warning of higher spending, deficits, taxes, unemployment and other economic ills.

Markets appear to share at least some of his concerns, Kurgan said.

“The sudden surge by the NDP in the polls, that’s caused a little bit of concern and it’s likely that I will be busy Monday evening trading the Canadian dollar,” he said.

Poll figures on Friday suggested that the NDP and Liberals together could win enough seats to form a coalition government.

But Douglas Porter, deputy chief economist of the Bank of Montreal, believes a minority Conservative government is still the most likely scenario, an outcome that won’t much matter to markets since Canadians have been dealing with minority governments for a decade.

 
 
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