September 16, 2019 / 8:43 PM / 3 months ago

EMERGING MARKETS-Latam FX subdued, Colombia stocks gain after Saudi attacks

 (Updates prices)
    By Agamoni Ghosh
    Sept 16 (Reuters) - A surge in crude prices in the wake of
attacks on Saudi Arabia's oil facilities drew muted reaction
from Latin American currencies on Monday, while gains in oil
producers supported Colombia's stock markets.
    Oil prices surged nearly 20% at one point on Monday after
the attack in Saudi Arabia, the world's biggest oil exporter,
halved the kingdom's production.
    But prices came off their peaks after President Donald Trump
authorized the use of the U.S. emergency stockpile to ensure
stable supply, helping the dollar climb against a basket of
major currencies.
    Trump also said the United States was "locked and loaded"
for a potential response to the strikes, and that Iran appeared
responsible, however, raising tensions.
    While currencies of some oil-exporters benefit from the
steep rise in oil prices, concerns that an oil supply shock and
geopolitical tensions would damage an already fragile global
economy sapped investor demand for riskier assets.
    "The jump in oil prices in this case is not stemming from
economic growth factors for exporters but from geopolitical
tensions which has a certain risk sentiment attached to it,"
said Cristian Maggio, head of emerging markets strategy at TD
Securities. 
    The Brazilian real and the Mexican peso edged
lower, while Chile's peso fell 0.2% after weak Chinese
data fueled worries about demand for copper.
    Colombia's peso shed early gains to trade flat as the
dollar firmed.    
    Stock indices in the region were mixed with Brazil's Bovespa
 down 0.35%. Shares in state-controlled oil firm
Petrobras jumped more than 3% as oil prices rallied,
while airlines, including Azul SA and Gol Linhas
Aereas Inteligentes, slumped more than 7% on concerns
of rising fuel costs.
    Colombia's main stock index jumped more than 1%,
helped by shares of oil firm Ecopetrol SA. Oil is a
main export for Latin America's fourth-largest economy.
    Stock markets in Mexico were shut for a local holiday. 

 Latin American stock indexes and currencies at 1957 GMT: 
    
        Stock indexes                  Latest       Daily %
                                                     change
 MSCI Emerging Markets                    1025.81       -0.08
 MSCI LatAm                               2694.18       -0.56
 Brazil Bovespa                         103187.63        -0.3
 Mexico IPC                                     -           -
 Chile IPSA                               5069.68         1.3
 Argentina MerVal                        30447.41       1.032
 Colombia IGBC                           13006.57        1.36
                                                             
           Currencies                  Latest       Daily %
                                                     change
 Brazil real                               4.0891       -0.13
 Mexico peso                              19.4399       -0.14
 Chile peso                                 709.3       -0.20
 Colombia peso                            3362.48       -0.03
 Peru sol                                   3.333       -0.36
 Argentina peso (interbank)               56.2600       -0.20
                                                   
 

 (Reporting by Agamoni Ghosh and Sruthi Shankar in Bengaluru
Editing by Sonya Hepinstall)
  
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