July 17, 2019 / 3:22 PM / 2 months ago

EMERGING MARKETS-Latam stocks dip on U.S.-China trade jitters; Currencies rise

    By Agamoni Ghosh
    July 17 (Reuters) - Latin American stock indices were
subdued on Wednesday as a re-emergence of trade tensions between
the United States and China kept investors on the sidelines, but
a recovery in oil prices and a soft dollar lifted currencies in
the region. 
    MSCI's index of Latin American stocks fell
0.1% with heavy-weights Brazil and Mexico stocks
making marginal moves. 
    Sao Paulo-traded stocks flitted between positive and
negative territory, while the real currency inched 0.2%
higher as investors looked for more policy directions beyond the
pension reforms. 
    Brazilian President Jair Bolsonaro's administration, which
has been looking to bring the country's fiscal deficit situation
under control, said it was planning to unveil a stimulus package
worth 63 billion reais ($16.8 billion), according to newspaper
Valor Economico.
    What the package will entail and how much it will add to
government's savings over and above the 900 billion reais
($240.10 billion) expected from the pension reform is not known
yet. 
    Mexican stocks slid 0.2% but telecom  operator
America Movil rose 3% after a surge in its
second-quarter net profit on the back of foreign exchange gains.
    The peso which took a hit in the previous session
after the government's new Pemex plan failed to impress
investors managed to partly recover, moving 0.3% higher.
    "The markets are still giving it some benefit of the doubt
at the moment but that could evaporate real soon," said
Christian Lawrence, senior strategist, Latam FX, Rabobank.  
    "There is really not much to be optimistic about the plan
given the task at hand is huge and doesn't seem this plan will
change anything for Pemex."  
    Pemex, the world's most indebted oil company was downgraded
by Fitch to speculative, or "junk," earlier this year while
Moody's puts it at just one notch higher. A downgrade from
Moody's would formally confirm Pemex as a junk credit.   
    The Chilean peso and Colombian peso moved
higher between 0.2% and 0.4%, while the Argentinian peso
outperformed its Latin American peers.     
    Key Latin American stock indexes and currencies at 1500 GMT
 Stock indexes                        daily %
                             Latest    change
 MSCI Emerging Markets       1055.25    -0.48
                                      
 MSCI LatAm                  2933.83     0.02
                                      
 Brazil Bovespa            103845.52     0.07
                                      
 Mexico IPC                 42910.81    -0.07
                                      
 Chile IPSA                  5070.34    -0.12
                                      
 Argentina MerVal           41952.27     0.39
                                      
 Colombia IGBC              13120.15     -0.1
                                      
                                             
 Currencies                           daily %
                                       change
                              Latest  
 Brazil real                  3.7647     0.15
                                      
 Mexico peso                 19.0375     0.25
                                      
 Chile peso                    681.8    -0.19
                                      
 Colombia peso               3191.22     0.43
 Peru sol                      3.286     0.03
                                      
 Argentina peso              42.4800     0.54
 (interbank)                          
                                      
 

 (Reporting by Agamoni Ghosh in Bengaluru
Editing by Alistair Bell)
  
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