January 23, 2020 / 7:42 PM / 2 months ago

EMERGING MARKETS-Brazil stocks at record high; broader Latam subdued amid China virus fears

    * Data show jump in Brazil tax revenue 
    * China virus fears erode risk appetite
    * Colombian peso slips, mirroring lower oil prices

 (Adds details, updates prices)
    By Ambar Warrick
    Jan 23 (Reuters) - Brazilian stocks and the real rose on
Thursday after data showed a jump in federal tax collections,
while broader Latin American assets stuck to a tight range as
concerns over a virus outbreak in China roiled global markets.
    Latin America's largest economy saw federal tax revenue rise
to a five-year high in 2019, boosted by an increase in the
corporate tax take. The data underpins optimism over the economy
amid sweeping structural reforms and a rebound in economic
    The Bovespa rose as much as 0.8% to a record high of
119,342.140, while the real firmed about 0.2% to the
    "We are in the beginning of a new economic cycle, which
should help a resumption in growth without that much pressure on
inflation," said Luiz Ribeiro, manager of the Latin America
Equity Fund at asset manager DWS Group.
    "The approval of the pension reform last year was a major
positive...The impact of that is not short term in terms of
savings for the government, but it is (positive) in terms  of
confidence," Ribeiro added.
    Meanwhile, other Latin American assets were largely subdued,
with an index of regional currencies marking
small moves. Emerging markets saw sustained selling through the
day as concerns over the economic fallout from the Chinese
coronavirus eroded risk appetite.
    The Chilean peso dropped about 0.7% to the dollar,
while the Mexican peso fell 0.5%. 
    Stocks in the two countries also trended lower for the day.
    Data showed Mexican consumer price inflation was very
slightly above forecast in the first half of January, but
remained close to the central bank's target rate. 
    Colombia's peso slipped 0.9% against the dollar after
prices of oil, the country's main export, fell more than 1%.

    Argentina's peso fell slightly, while stocks
also retreated after ratings agency Fitch downgraded the
country's local-currency issuer default rating. 
    The downgrade comes just a day after the country was forced
to extend a deadline for creditors to decide on a plan to delay
a $250 million bond repayment originally due on Jan. 26.

    Economic activity in the country also fell 1.9% year-on-year
in November, data showed.
    Key Latin American stock indexes and currencies at 1915 GMT:
    Stock indexes             Latest      Daily % change
 MSCI Emerging Markets         1121.40              -1.0588
 MSCI LatAm                    2918.00                 0.34
 Brazil Bovespa              119242.80                 0.72
 Mexico IPC                   45290.59                -0.69
 Chile IPSA                    4651.54                 -0.4
 Argentina MerVal             41188.61               -1.937
 Colombia COLCAP               1649.21                -0.07
       Currencies             Latest      Daily % change
 Brazil real                    4.1677                 0.16
 Mexico peso                   18.7770                -0.51
 Chile peso                      776.3                -0.73
 Colombia peso                 3359.32                -0.90
 Peru sol                        3.319                -0.18
 Argentina peso                60.0700                 0.01

 (Reporting by Ambar Warrick in Bengaluru
Editing by Alistair Bell)
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