LatAm stocks, currencies down as tepid investor appetite weighs
Latin American currencies and stocks extended losses on Tuesday, swept up in a global sell-off fueled by concerns of slowing global growth and investors pivoting toward safer assets in the developed world.
MSCI’s indexes of Latin America stocks and regional currencies fell for a second straight day, with declines of 1 percent and 0.4 percent, respectively.
Gabriel Casillas, chief economist and head of research at Banorte, wrote that among the main drivers for equity markets was worry over U.S.-China trade tensions, coupled with growing recommendations from Wall Street to add safer assets to investor portfolios.
All equity markets in Latin America ended the day lower.
Mexican stocks, which did not trade on Monday, slid 1.3 percent, with all but six names of the 35 on the index in negative territory. The peso weakened marginally, a day after recording a 1.1 percent slide.
Investors are on the watch for a public consultation the incoming administration has scheduled for the weekend, about a month after the scrapping of an already-started airport project pummeled the peso to multi-month lows.
There are 10 policy proposals to be voted on, including a new rail line and the building of a $2.5 billion refinery, which President-elect Andres Manuel Lopez Obrador’s incoming government feels will boost gasoline production and help cut growing fuel imports.
Financial markets in Brazil, Latin America’s largest economy, were closed for a local holiday.
Argentina’s peso weakened about 0.7 percent while the country’s Merval stock index sank 4.5 percent to put a decisive end to a three-session winning run.
The index’s slide was its biggest one-day fall in nearly three months. The market was closed on Monday.
Chile’s peso weakened 0.3 percent, down for the first session in five, while benchmark stocks fell 1.2 percent.
A 3.9 percent slide in lithium producer SQM’s securities weighed heavily on the main index.
In Colombia, stocks dropped 1.7 percent, adding to Monday’s 1 percent fall. The peso weakened about 0.7 percent, also down for a second straight session.
Source: Reuters
