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Agamoni Ghosh

EMERGING MARKETS-Latam stocks rise, Argentine peso attempts recovery

16 Aug 2019

By Agamoni Ghosh Aug 16 Latin American stocks rose on Friday with a global rebound in equities, as expectations of further stimulus by central banks offset worries of sluggish economic growth, while Argentina's peso was set to record its worst week in over 3 years. MSCI's index of Latin American stocks rose 0.8% led by gains on Brazil's Bovespa. The index was still on track to lose close to 6% through a chaotic week as mounting worries of a global recession sparked in part by the long-drawn U.S.-China trade war, kept investors on the edge. The Argentine peso rose 1.8%, attempted a mild rebound from a near-twenty percent fall this week which came on the back of a surprise defeat for sitting President Mauricio Macri in the presidential primaries on Sunday. To lift battered market sentiment, Macri announced an end to sales taxes on basic food products until the end of the year, while central bank barred private banks from having total dollar holdings exceeding 5 percent from Aug 20 onwards. Mexico's peso was marginally higher a day after the central bank cut its key lending rate for the first time in five years citing slowing inflation and increasing slack in the economy. "If you were to look at the pure nuts and bolts of the Mexican economy, which is low growth and inflation has come down significantly, the rate cut is long overdue," said David Rees, emerging market strategist at J. Safra Sarasin Asset Management. "That central bank is still cautious though and as there is a lot going on in the background. So we have to see if the Fed cuts rate in September and then probably Mexico will follow." The surprise move by Mexican policymakers follows rate cuts by central banks around the world in the last week as a trade-induced slowdown shows more signs of hindering global growth. Chile's peso rose only marginally, while stocks gained 0.5%. Key Latin American stock indexes and currencies at 1411 GMT Stock indexes daily % change Latest MSCI Emerging Markets 968.14 0.48 MSCI LatAm 2594.64 0.6 Brazil Bovespa 99338.60 0.28 Mexico IPC 38857.46 0.73 Chile IPSA 4800.19 0.5 Argentina MerVal - - Colombia IGBC 12428.38 0.3 Currencies daily % change Latest Brazil real 3.9977 0.15 Mexico peso 19.5808 0.11 Chile peso 709.75 0.08 Colombia peso 3445.08 0.69 Peru sol - - Argentina peso 56.8500 1.27 (interbank) (Reporting by Agamoni Ghosh and Aaron Saldanha in Bengaluru Editing by Nick Zieminski)

China stimulus hopes, chip stocks push European shares higher

16 Aug 2019

European shares churned higher on Friday, boosted by positive investor sentiment after China hinted of plans to spur economic growth while chipmaker stocks in the region propped up markets, helped by solid earnings news from U.S. counterparts.

EMERGING MARKETS-Carnage in Argentine markets after Macri suffers blow in primaries

12 Aug 2019

* Argentina's peso hits record low * Merval index plummets nearly 10% * Bleak chances of Macri winning October elections By Agamoni Ghosh Aug 12 Argentina's peso collapsed on Monday after voters rejected President Mauricio Macri's austere economic policies and gave Alberto Fernandez and his running mate, former President Cristina Fernandez de Kirchner, a victory in presidential primaries on Sunday. The peso fell to a record low, as much as 30% against the dollar in early trade, as Macri lost by a far greater margin than expected. The result cast serious doubt on Macri's chances of re-election for a second term in October, with analysts warning of widespread panic in financial markets in the coming days. "This result is much more extreme than our market bear case scenario," BAML analysts said in a note. "Fernandez has emphasized the peso is extremely over-valued and needs a correction. We expect heavy pressure in ARS with a potential devaluation in coming weeks." The carnage was a reminder for markets of a 26% plunge in the peso on Dec. 17, 2015, when the newly elected Macri government floated the currency as part of a slew of promised free-market reforms aimed at aiding the crisis-ridden economy. Shares on the Merval index opened 9% lower, with cement producer Loma Negra, financial conglomerate Grupo Supervielle SA and electricity distributor Pampa Energia SA, all dropping over 30%. The steep moves in Argentina pressured the Latin American index of currencies, which dropped over 2%, while stocks fell over 4%. Brazil's real fell below the 4.00 per dollar for the first time since late May, feeling the heat from its neighboring market's volatility, while Mexico's peso lost over 1%. Chile's peso fell nearly 1.5%, with dropping copper prices adding pressure on the world's largest producer of the red metal. All major stock indices were in the red, but Colombia's IGBC index managed to outperform, only 0.1% lower compared with its Latin American peers. Key Latin American stock indexes and currencies at 1440 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 972.81 -0.85 MSCI LatAm 2651.24 -4.18 Brazil Bovespa 101904.97 -2.01 Mexico IPC 39941.90 -1.19 Chile IPSA 4808.06 -2.14 Argentina MerVal 39631.80 -10 Colombia IGBC 12492.79 -0.1 Currencies Latest Daily % change Brazil real 4.0017 -1.55 Mexico peso 19.6282 -1.16 Chile peso 717.8 -0.93 Colombia peso 3433.8 -1.19 Peru sol 3.396 -0.47 Argentina peso 57.0000 -25.54 (Reporting by Agamoni Ghosh and Susan Mathew in Bengaluru; editing by Jonathan Oatis)

European shares bounce on China respite

08 Aug 2019

European shares rose for a second day on Thursday, as investors took heart from a stronger-than-expected rebound in Chinese exports and steadying of the yuan after a week of turmoil sparked by an escalation in U.S.-China trade tensions. | Video

Miners hit as China woes hurt European stocks

05 Aug 2019

European shares joined a China-driven global sell-off on Monday, dragged down heavily by commodity-linked stocks as anxiety over trade frictions with the United States sent the country's yuan below 7 per dollar for the first time in a decade. | Video

EMERGING MARKETS-Latam forex falls as investors avoid riskier assets on trade fears

02 Aug 2019

* Petrobras posts its highest ever quarterly profit * Latin American currencies worst day in 2019 * EM stocks on biggest slide since December 2015 By Agamoni Ghosh Aug 2 Latin American currencies fell on Friday as U.S.-China trade tensions pulled investors away from riskier assets, but a smashing quarter from Brazilian state-run oil firm Petrobras helped Brazil stocks outperform regional indices. U.S. President Donald Trump vowed to hike tariffs on Chinese imports starting on Sept. 1 on Thursday, a day after negotiators from both countries concluded a meeting in Shanghai without significant signs of progress to end a trade war. Emerging market assets, already reeling from the U.S. Federal Reserve's hawkish rate-cut outlook earlier this week, fell to near two-month lows, with Latin American currencies on course to post their worst week for 2019. "While Trump has not closed the doors for more talks ... we do not expect a trade deal between the U.S. and China to materialize," said Piotr Matys, Rabobank emerging markets FX strategist. "Even if an agreement is reached, it is likely to be weak and unsustainable as China will be reluctant to implement required structural reforms to satisfy the U.S." Stocks in the region fell across the board but Sao Paulo's Bovespa stocks bucked the trend after Petrobras posted its highest ever quarterly profit, credited in large part to billions of reais in asset sales. Shares of state-run power company Eletrobras rose 3.5% after President Jair Bolsonaro approved its privatization plan. Mexico's IPC index was at its lowest level since May, while stocks in Chile were on track to post their third consecutive session of losses. Chile's peso fell 0.6%, partly hurt by a dip in copper prices, its main export. Minutes released from the central bank's recent meeting showed policymakers in Chile considered cutting the benchmark interest rate, but ultimately opted to maintain it, citing a "relatively limited benefit." Chile, the world's top copper producer has shown a below-expected economic performance, in part due to weaker mining activity and the impact the U.S.-China trade dispute has had on the price of the metal. Key Latin American stock indexes and currencies at 1435 GMT Stock indexes daily % change Latest MSCI Emerging Markets 1002.73 -2.13 MSCI LatAm 2747.48 -1.72 Brazil Bovespa 101867.11 -0.10 Mexico IPC 39852.59 -1.22 Chile IPSA 4888.80 -1.05 Argentina MerVal 40727.38 -1.6 Colombia IGBC 12484.52 -0.27 Currencies daily % change Latest Brazil real 3.8820 -0.91 Mexico peso 19.3113 -0.41 Chile peso 710.7 -0.61 Colombia peso 3364.48 -0.77 Peru sol 3.339 -0.39 Argentina peso 44.6800 -0.65 (interbank) (Reporting by Agamoni Ghosh in Bengaluru Editing by Susan Thomas)

EMERGING MARKETS-Stocks on weakest run in over 3 years as U.S.-China trade woes deepen

02 Aug 2019

* Trump to impose 10% tariffs on rest of U.S. imports from China

EMERGING MARKETS-Latam currencies slide as further Fed rate cuts uncertain

01 Aug 2019

* Latam FX on track to post worst day since late-March * Emerging-market stocks on worst run in almost a year * Fed cuts rates by 25 basis points, further cuts uncertain By Agamoni Ghosh Aug 1 Latin American currencies were on track to post their worst day in nearly five months on Thursday as investors scurried from riskier assets and piled on to the safe-heaven U.S. dollar after the U.S. Federal Reserve dampened hopes for a long interest rate-cutting campaign. The U.S. central bank's policy-setting Federal Open Market Committee (FOMC) cut rates as expected on Wednesday but Fed Chairman Jerome Powell said the move might not be the start of a lengthy campaign to shore up the economy against risks, disappointing investors who hoped for a more dovish stance. Emerging market assets, which had rallied earlier in the year in anticipation of a more supportive stance by the Fed, fell to one-month lows, with developing world stocks on track to post their longest run of declines in almost a year. "The hawkish cut from the FOMC opens up increased monetary policy divergence between the U.S. and EM as many emerging market central banks have embarked on easing cycles, some in aggressive fashion," Morgan Stanley analysts said in a note. "USD strength is the natural outcome and we would need to see the Fed taking a more dovish stance in future to halt the move." Weak manufacturing data from around the world added to the dour mood fuelling worries a prolonged U.S.-China trade war and an economic slowdown could tilt the world towards recession, and central banks would have to fight with depleted ammunition. Brazil's real fell about 0.5% a day after the central bank kicked off an easing cycle with a sharper rate cut than most economists expected and after data showed manufacturing slowed in Latin America's largest economy in July. A jump in financial stocks, however, helped push Sao Paulo's Bovespa higher, but Vale shed over 2% after the miner said it swung to a quarterly loss after giving $2 billion in fresh writedowns for two deadly dam bursts. Mexican stocks were flat, while the peso slid marginally. Mexico's Finance Ministry lowered its growth forecast for 2019 to 1.1% as evidence mounts that Latin America's second-largest economy is falling short of the government's expectations. The Colombian and Argentinian pesos, each shed over 1%. Key Latin American stock indexes and currencies at 1440 GMT Stock indexes daily % Latest change MSCI Emerging Markets 1030.93 -0.59 MSCI LatAm 2845.14 0.05 Brazil Bovespa 103614.93 1.29 Mexico IPC 40825.85 -0.09 Chile IPSA 4987.21 0.3 Argentina MerVal 42359.39 0.7 Colombia IGBC 12709.51 -0.14 Currencies daily % Latest change Brazil real 3.8056 -0.47 Mexico peso 19.1700 -0.23 Chile peso 704.6 -0.17 Colombia peso 3321.42 -1.29 Peru sol 3.316 -0.36 Argentina peso 44.2600 -1.14 (interbank) (Reporting by Agamoni Ghosh in Bengaluru Editing by Paul Simao)

UPDATE 1-EMERGING MARKETS-Stocks, FX fall as Fed dampens rate-cut outlook, growth worries linger

01 Aug 2019

* Czech Koruna slips on dour business sentiment (Updates prices, adds milestones)

EMERGING MARKETS-Stocks, FX fall as Fed dampens rate-cut outlook, growth worries linger

01 Aug 2019

Aug 1 Emerging market assets fell to one-month lows on Thursday after the U.S. central bank dampened hopes for a long rate-cutting campaign, even as weak global factory data showed the impact a drawnout U.S.-China trade war was having on economic growth.

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