March 2, 2018 / 11:33 PM / 3 months ago

EMERGING MARKETS-Latin American stocks seesaw after Trump tariff threats

 (Recasts with stocks recovering, Mexican peso outlook)
    By Miguel Gutierrez
    MEXICO CITY, March 2 (Reuters) - Latin American stocks ended
mixed on Friday, with some indexing clawing back narrow gains
after earlier sinking broadly on concerns about U.S. President
Donald Trump's plan to tack tariffs on to steel and aluminum
imports.
    Brazil and Mexico, the region's two largest economies, are
both major steel exporters to the United States.
    Trump's threats to unleash a trade war over steel and
aluminum crushed hopes of substantial progress in the latest
talks in Mexico City to rework the North American Free Trade
Agreement.
    Analysts said Mexico's peso could face
pressure from concerns the negotiations could flop. Mexico sends
about 80 percent of its total exports to the United States.
    "Volatility from trade issues will continue to put pressure
on the peso in the coming weeks along with the approach of the
elections," said Carlos Capistran, an economist at Bank of
America Merrill Lynch.
    Mexico will elect its next president on July 1 and a leftist
is leading in polls.
    The peso touched a seven-week low early in the day, but
firmed to end the session little changed. The currency shed
about 1.5 percent against the dollar on the week.
    Across Latin America, shares of miners and steelmakers
weakened after news of Trump's proposal to slap a 25 percent
tariff on imported steel and a 10 percent tariff on aluminum.

    Brazilian miner Vale SA, which mines key
steel-making ingredient iron ore, fell about 1.6 percent while
steelmaker Minas Gerais SA shed nearly 4 percent.

    "Everyone wanted to take profits," said Ari Santos, manager
at the Bovespa desk at brokerage Hencorp Commcor. "So the market
took advantage of Trump's talk to do it." 
    Brazil's Bovespa has pulled back more than 2 percent
since it hit a record high last month. On Friday, it shook off
broad early losses to end trade up 0.45 percent.
    In Chile, iron and steelmaker Cap SA fell over 3
percent, after falling 5.6 percent on Thursday.
    
    Key Latin American stock indexes at 2230 GMT:
    
 Stock indexes                Latest      Daily pct  YTD pct
                                           change     change
 MSCI Emerging Markets          1,182.06      -0.85      2.04
                                                     
 MSCI LatAm                     3,065.75       0.11       8.4
                                                     
 Brazil Bovespa                85,761.34       0.45     12.25
 Mexico IPC                    47,548.10      -0.11     -3.66
 Chile IPSA                     5,545.48       0.32     -0.34
 Chile IGPA                    27,799.46      -0.03     -0.65
 Argentina MerVal              31,900.70      -0.35      6.10
 Colombia IGBC                 11,268.14      -0.47     -0.90
 Venezuela IBC                  4,161.85      -0.84    229.48
 
 (Additional reporting by Gram Slattery in Sao Paulo, editing by
G Crosse)
  
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