Mexico City: Mexico’s main stock index closed out its worst quarter in over 17 years on Monday, dragged down by doubts about how the new leftist government will manage the economy as well as concerns over global growth and trade.

The S&P/BMV IPC stock index lost 15.89 per cent in the fourth quarter, its steepest drop for a three-month period since the third quarter of 2001, when the September 11 terrorist attacks hit the United States. That quarter the market fell by nearly 19 per cent.

Before taking office earlier this month, President Andres Manuel Lopez Obrador rattled financial markets when on October 29 he said he would scrap a partly built $13 billion (Dh47.74 billion) new Mexico City airport on the basis of a straw poll that was widely criticised.

The decision kicked off a dispute with some bondholders of debt issued to finance the airport and raised fears Lopez Obrador could pursue an agenda characterised by arbitrary decision-making and frequent use of referendums.

Market sentiment was also hammered by a bill drafted by Lopez Obrador’s National Regeneration Movement to limit bank fees and another to regulate the mining sector.

“Those decisions were not well received and the unease has persisted among investors,” said James Salazar, economist at CI Banco.

After seesawing earlier on Monday, the index finally closed 0.44 per cent higher at 41,640.27.

During the global financial crisis in the third quarter of 2008, the Mexican bourse fell 15.3 per cent.

Global markets have been depressed this year by US President Donald Trump’s trade dispute with China, uncertainty surrounding Britain’s planned departure from the European Union and more recently the US federal government shutdown.

Mirroring falls in other major stock exchanges, Mexico’s main index posted its worst annual performance in 10 years, declining 15.63 per cent in 2018.

Still, the index has steadied in the last few weeks, having fallen well below the 40,000 level in late November.

The market will likely continue to move “laterally” during the first half of 2019 until it becomes clearer how Lopez Obrador is managing public finances, said Jorge Placido, an analyst at brokerage Vector Casa de Bolsa.

“Investors are willing to pay and stick around until there is more clarity about the economy,” said Placido.