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EMERGING MARKETS-Brazil stocks drag Latam lower; focus turns to U.S. Fed

14 Sep 2019

(Updates prices, analyst comment) By Ambar Warrick Sept 13 Brazilian stocks edged lower on Friday after several strong sessions as investors braced for key monetary policy decisions from the U.S. Federal Reserve, although most markets were set for weekly gains on easing U.S.-China trade tensions. Emerging market assets have benefited this week from increased risk appetite after Washington and Beijing officials made concessions on retaliatory tariffs, while the European Central Bank cut interest rates and promised more stimulus. However, the mood soured somewhat on Friday as investors scaled back expectations for aggressive policy easing by the U.S. Federal Reserve next week following better-than-expected economic data. "The market has taken back a lot of their easing expectations, and I think that's overall negative for EM," said Win Thin, global head of emerging market currency strategy at Brown Brothers Harriman. MSCI's index of Latin American stocks declined 1% but was set to add about 0.3% for the week, its third straight week of gains. Brazil's Sao Paolo index fell 1%, with consumer discretionary stocks weighing the most as investors locked in profits after gaining in the past six of eight sessions. The index was set to gain 0.4% this week, hovering just below record-high levels. Brazil's central bank is widely expected to cut its record-low rates by 50 basis points next week in order to shore up Latin America's largest economy. "The (Brazilian) economy is still very sluggish compared to where it should be and inflation is low, so I think the central bank is under pressure to ease," Thin added, noting that a total 1% cut by the bank may be likely this year, which would hurt the real. The Brazilian real fell 0.7%, and was set for its worst week since late-August. Mexican stocks rose about 0.3%. President Andres Manuel Lopez Obrador said on Friday that state oil company Pemex will consolidate its finances and "has a bright future", a day after the debt-ridden state oil firm carried out the biggest refinancing operation in its history. The Mexican peso fell 0.1%, and was set to gain 0.5% this week. Chilean stocks rose 0.6% and were set for an eighth straight gaining session, recovering from a more than two-year low touched late-August. The Chilean peso rose for a second straight day, tracking a recovery in the prices of copper, the country's top export. Argentine equities rose about 4% and were set to gain more than 9% for the week as lower stock valuations attracted bargain buying after a crash in August. Latin American stock indexes and currencies at 1926 GMT Stock indexes Daily % change Latest MSCI Emerging Markets 1026.63 0.42 MSCI LatAm 2689.25 -1.03 Brazil Bovespa 103336.41 -0.99 Mexico IPC 42800.66 0.31 Chile IPSA 5005.40 0.62 Argentina MerVal 30236.28 3.852 Colombia IGBC 12792.69 -0.8 Currencies Daily % change Latest Brazil real 4.0881 -0.71 Mexico peso 19.4418 -0.06 Chile peso 707.85 0.16 Colombia peso 3361.45 0.05 Peru sol 3.321 0.09 Argentina peso 56.0900 0.05 (interbank) (Reporting by Ambar Warrick in Bengaluru; Editing by Cynthia Osterman)

EMERGING MARKETS-Latam markets post mild gains, U.S. Fed meet in focus

13 Sep 2019

By Ambar Warrick Sept 13 Latin American markets edged up on Friday as easing Sino-U.S. trade tensions continued to help risk appetite, although gains were capped by investors scaling back expectations of aggressive easing by the U.S. Federal Reserve. Conciliatory trade measures between Washington and Beijing had set up most regional markets for weekly gains, with stimulus measures by the European Central Bank also lending support. Regional currencies firmed slightly against a steady dollar, and were set to add about 0.5% for the week. The Brazilian real rose about 0.1%. A central bank indicator showed that economic activity fell slightly in July, in contrast to other data that suggested the economy started the third quarter on strong footing. Markets are now looking to a Brazilian central bank meeting next week, where the bank is widely expected to cut its record-low rates to shore up Latin America's largest economy. Better-than-expected inflation and retail sales data in the United States saw market participants toning down their expectations for policy easing by the Fed next week. "The market has taken back a lot of their easing expectations, and I think that's overall negative for EM," said Win Thin, global head of emerging market currency strategy at Brown Brothers Harriman. "Many asset markets have priced in an aggressive Fed easing, and as markets take that back they're going to suffer." Traders currently see an 88.8% chance of a quarter percentage point cut from the Fed this month, down from 90% a week ago, according to CME's FedWatch. MSCI's index of Latin American stocks rose 0.3%, and was set to add about 1.5% for the week, its third straight week of gains. Brazil's Sao Paolo index was flat as gains in financials and material stocks were offset by losses in a bevy of sectors. The index was set to add 1.3% for the week, its third straight week of gains. Mexican stocks rose about 0.7%. President Andres Manuel Lopez Obrador said on Friday that state oil company Pemex will consolidate its finances and "has a bright future", a day after the debt-ridden state oil firm carried out the biggest refinancing operation in its history. The Mexican peso added about 0.4%. Latin American stock indexes and currencies at 1446 GMT Stock indexes Daily % change Latest MSCI Emerging Markets 1028.75 0.63 MSCI LatAm 2724.81 0.28 Brazil Bovespa 104430.84 0.06 Mexico IPC 42949.39 0.65 Chile IPSA 4982.34 0.12 Argentina MerVal 29652.93 1.848 Colombia IGBC 12864.94 -0.24 Currencies Daily % change Latest Brazil real 4.0563 0.07 Mexico peso 19.3665 0.33 Chile peso 707.05 0.28 Colombia peso 3355.27 0.23 Peru sol 3.3108 0.40 Argentina peso 56.1600 -0.07 (interbank) (Reporting by Ambar Warrick in Bengaluru Editing by Alistair Bell)

EMERGING MARKETS-Latam stocks scale one-month highs on China-U.S. trade optimism

13 Sep 2019

(Updates prices, adds context on Mexico, Brazil) By Ambar Warrick Sept 12 An index of Latin American stocks scaled one-month highs on Thursday, while currencies strengthened as conciliatory trade measures between the United States and China aided risk appetite. U.S. President Donald Trump delayed an increase in tariffs on Chinese goods by two weeks after China exempted some U.S. drugs and other goods from tariffs. The moves underpinned optimism over meaningful headway being made ahead of trade talks scheduled in October. "The goodwill shown by both the U.S. and China lifted the market, a combination of light positioning, cheap valuation and the stability of the Chinese yuan could help emerging markets to recover," Morgan Stanley strategists said in a note. "We think some emerging market high yielders will do well in the near term." The European Central Bank's interest rate cut and outlining of stimulus measures on Thursday also spurred buying on expectations of other major economies resorting to similar measures. Investors will now look to moves from the U.S. Federal Reserve and the Brazilian central bank next week. Speculation over likely interest rate cuts by the Fed has underpinned flows into emerging markets this year. MSCI's Latin American stocks index tacked on about 0.8%, hitting its highest level since Aug. 12, propped up by benchmark-heavy Brazilian shares. The Sao Paulo. index rose 1%, with materials stocks pushing up the index the most. Commodity heavyweight Vale SA rose about 3.6% after iron ore prices rose to a five-week high in anticipation of some restocking demand ahead of a holiday in China. Sources told Reuters that Brazil's development bank was mulling strategies to sell its stakes in Vale and state-run oil and gas heavyweight Petrobras. Chilean stocks rose about 0.3% and were slated for a seventh straight session of gains. The broad optimism helped the Brazilian real gain about 0.3% even as Senate leader Fernando Bezerra said the passage of tax reforms would likely be delayed to 2020, a major roadblock to the government's economic reform drive. The Mexican peso rose about 0.4% to near a one-month high. State-run oil firm Pemex on Thursday offered to prepay about a third of its $14.7 billion bonds maturing between 2020-2023, in President Andres Manuel Lopez Obrador's latest effort to shore up the debt-addled firm. Yields on Mexico's benchmark 10-year bonds were unchanged at 3:04 p.m. EDT (1904 GMT), having dipped earlier in the day. Argentina's peso traded steady after the country announced further control measures requiring anyone buying foreign currency to present a sworn oath promising to wait at least five days before using it to purchase bonds. Latin American stock indexes and currencies at 1926 GMT Stock indexes Daily % change Latest MSCI Emerging Markets 1024.38 0.72 MSCI LatAm 2719.21 0.79 Brazil Bovespa 104483.95 1 Mexico IPC 42696.48 -0.12 Chile IPSA 4973.55 0.33 Argentina MerVal 28918.88 1.052 Colombia IGBC 12926.27 0.34 Currencies Daily % change Latest Brazil real 4.0566 0.18 Mexico peso 19.4185 0.44 Chile peso 709 0.94 Colombia peso 3363 0.33 Peru sol 3.324 0.42 Argentina peso 56.1000 0.14 (interbank) (Reporting by Ambar Warrick in Bengaluru; Editing by Paul Simao)

EMERGING MARKETS-Latam stocks hit 1-mth high on U.S-China tariff delay, ECB stimulus

12 Sep 2019

By Ambar Warrick Sept 12 Latin American stocks hit a one-month high on Thursday as conciliatory trade measures by the United States and China aided risk appetite, spurring inflows into emerging markets. U.S. President Donald Trump delayed an increase in tariffs on Chinese goods by two weeks, after China exempted some U.S. drugs and other goods from tariffs. The moves underpinned optimism over meaningful headway being made in trade talks scheduled in October. "The goodwill shown by both the U.S. and China lifted the market, a combination of light positioning, cheap valuation and the stability of the Chinese yuan could help emerging markets to recover," said Morgan Stanley strategists in a note. "We think some emerging market high yielders will do well in the near term." The European Central Bank's interest rate cut and outlining of stimulus measures on Thursday also spurred buying, on expectations of other major economies resorting to similar measures. Investors will now look to moves from the U.S. Federal Reserve and the Brazilian central bank next week. MSCI's Latin American stocks index tacked on about 0.8%, notching a one-month peak, propped up by benchmark-heavy Brazilian shares. The Sao Paulo. index rose 0.4% on broad-based gains, with telecom stocks marking large gains after the Brazilian Senate approved a bill to modernize telecommunication laws and boost companies in the sector. Telefonica Brasil SA added about 2%. Mexican and Chilean stocks rose 0.4% and 0.2%, respectively. MSCI's index of Latin American currencies touched a near one-month high, with the Brazilian real and Mexican peso adding about 0.5% and 0.3%, respectively. Argentina's peso opened steady after the country announced further control measures requiring anyone buying foreign currency to present a sworn oath promising to wait at least five days before using it to purchase bonds. These measures come after the peso saw its worst month ever in August following a stunning upset for President Mauricio Macri by opposition leader Alberto Fernandez in the country's primary elections, which raised concerns of an interventionist government being voted in. Latin American stock indexes and currencies at 1426 GMT Stock indexes Daily % change Latest MSCI Emerging Markets 1025.42 0.82 MSCI LatAm 2721.63 0.88 Brazil Bovespa 104093.67 0.63 Mexico IPC 42920.16 0.4 Chile IPSA 4969.61 0.3 Argentina MerVal 28507.16 -0.387 Colombia IGBC 12910.44 0.21 Currencies Daily % change Latest Brazil real 4.0420 0.54 Mexico peso 19.4449 0.30 Chile peso 711.05 0.65 Colombia peso 3353.1 0.63 Peru sol 3.3268 0.34 Argentina peso 56.2600 -0.14 (interbank) (Reporting by Ambar Warrick in Bengaluru; Editing by Giles Elgood)

EMERGING MARKETS-Latam stocks buoyed by stimulus hopes, trade optimism

12 Sep 2019

(Updates prices, adds analyst quote) By Ambar Warrick Sept 11 Most Latin American stocks rose on Wednesday as the prospect of increased stimulus for major economies and positive cues from the Sino-U.S. trade front aided risk appetite, while currencies were mixed ahead of the European Central Bank's policy decision. MSCI's index of Latin American stocks rose 1.3%, holding near a one-month high, mirroring gains across global stock markets. Investors perceived as conciliatory a move from China to exempt certain U.S. products from additional retaliatory tariffs for a year. Markets also awaited the European Central Bank's monetary policy meeting on Thursday, where officials are widely expected to trim interest rates and introduce a stimulus package to shore up economic growth. Brazilian stocks firmed about 0.5%, with most support coming from consumer discretionary stocks after data showed that retail sales for July marked their best rise this year. Retailers Lojas Renner SA and Magazine Luiza SA rose about 2.5% and 4.6%, respectively, and were among the biggest boosts to the Bovespa. Chilean stocks rose about 1.6% to a more than one-month high as the country's equities continued to recover from a 2-1/2 year low in late-August. Mexican and Colombian equities added about 0.1% and 0.6%, respectively. Mexico's government will give state-owned Pemex $5 billion so the world's most indebted oil company can pay off bonds, the company said earlier in the day. Latin American currencies were mixed against a stronger dollar, with Brazil's real rising about 0.5% on the stronger retail sales reading. However, broader economic weakness in the country is expected to push Brazil's central bank to cut interest rates at a policy meeting next week. The central bank has already cut interest rates to a record low of 6.00%. "There's still an easing bias after this, so the market's obviously priced in a further easing trajectory from the BCB," said Sacha Tihanyi, deputy head of emerging markets strategy at TD Securities. "Chances are it (the real) is going to be dependent on broad dollar moves. Today's a bit of a deviation however, as the dollar's doing well against the euro." The Chilean peso dropped 0.6% as prices of copper, the country's top export, dipped after a sharp fall in Chinese auto sales raised fears of weaker demand. Chile's central bank Governor Mario Marcel told Reuters that Chile could be heading for its third interest rate cut within six months, with trade and political tensions adding much pressure on the economy. Latin American stock indexes and currencies at 1921 GMT: Stock indexes Daily % change Latest MSCI Emerging Markets 1017.42 0.92 MSCI LatAm 2695.19 1.32 Brazil Bovespa 103507.04 0.46 Mexico IPC 42618.79 0.07 Chile IPSA 4957.00 1.6 Argentina MerVal 28704.84 0.959 Colombia IGBC 12826.69 0.56 Currencies Daily % change Latest Brazil real 4.0615 0.82 Mexico peso 19.5238 -0.17 Chile peso 716 -0.61 Colombia peso 3374.1 -0.43 Peru sol 3.338 0.15 Argentina peso (interbank) 56.1700 -0.21 (Reporting by Ambar Warrick in Bengaluru; Editing by Cynthia Osterman)

EMERGING MARKETS-Brazil shares end 4-day run of gains, hit by weak China data

11 Sep 2019

(Updates prices, adds analyst quote) By Ambar Warrick Sept 10 Brazilian shares broke a four-day run of gains on Tuesday, mirroring declines in global stocks after weak China data fueled growth concerns, while currencies were tepid ahead of major central bank policy decisions. The Bovespa dropped 0.4%, easing off one-month highs as a handful of retailers fell on the news that U.S. online retail giant Amazon.com Inc will launch its Prime subscription service in the country. Magazine Luiza, Via Varejo and B2W fell between 4% to 6%, leading declines in the Bovespa. Major lenders including Banco Bradesco SA, Itau Unibanco Holding SA and Banco do Brasil SA dropped about 2% each after Brazil's government cut its annual inflation forecast, pointing to further monetary easing in Latin America's largest economy. The government also slightly raised Brazil's annual economic growth forecast. The MSCI's index of Latin American stocks retreated about 0.3%, with shares in Mexico and Colombia in the red after data showed China's producer prices shrank at the sharpest pace in three years in August, fueling fears of a global economic slowdown. Most currencies made slight moves against the dollar, as investors awaited the European Central Bank's monetary policy decision on Thursday, when it is expected to cut interest rates and restart an asset purchase programme. Investors, however, are anxious about how far policymakers are willing to go to stimulate their slowing economies. "Global markets have taken on a subdued tone as investors look ahead to Thursday's crucial ECB policy meeting," Ned Rumpeltin from TD Securities wrote in a note. The Brazilian real pared early losses and traded sideways, with other currencies in the region moving in a similar range. The Mexican peso added about 0.2%. Finance Minister Arturo Herrera said state-oil firm Pemex is exploring opening a bidding process for public-private contracts in order to ensure the debt-laden firm has enough money to invest and manage its debt profile. Latin American stock indexes and currencies at 1928 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1007.89 -0.27 MSCI LatAm 2663.72 -0.34 Brazil Bovespa 102807.52 -0.36 Mexico IPC 42609.18 -0.12 Chile IPSA 4880.60 0.41 Argentina MerVal 28176.04 3.678 Colombia IGBC 12768.22 -0.06 Currencies Latest Daily % change Brazil real 4.0975 -0.02 Mexico peso 19.5200 0.21 Chile peso 711.55 0.41 Colombia peso 3359.53 0.27 Peru sol 3.343 0.18 Argentina peso (interbank) 56.0000 0.04 (Reporting by Ambar Warrick and Sruthi Shankar in Bengaluru; Editing by Sandra Maler)

SE Asia Stocks-Most markets fall on weak China data; Singapore edges up

12 Jul 2019

* Singapore stocks inch up on hopes of policy easing * Thai stocks hurt by cenbank steps on capital flows * SE Asia stocks largely unchanged for the week By Ambar Warrick July 12 Most Southeast Asian stock markets ended lower on Friday after weak trade data from China, the region's biggest trading partner, spelt further weakness for the broader Asian economy. China's June exports fell and imports shrank more than expected as a trade tiff with the United States continued to erode demand in the country. Fears of a resurgence in trade tensions also weighed on regional stocks after U.S. President Donald Trump said in a tweet that China was not living up to promises it made on buying agricultural products from American farmers. Local stock indexes closed the week largely unchanged as buying in anticipation of U.S. monetary easing was offset by weaker economic readings. Investors now await second-quarter GDP data from China due on Monday. A Reuters poll sees growth slowing to its weakest pace in at least 27 years. Indonesian stocks closed 0.7% lower and led regional losses, with the maximum pressure on the benchmark coming from consumer staples and telecommunication stocks. Telekom Indonesia closed more than 2% lower, while cigarette maker Gudang Garam shed more than 3%. An index of the country's 45 most liquid stocks closed down 0.9%. Thai stocks ended 0.5% lower, with losses across all sectors. Oil and gas explorer PTT and hospital operator Bangkok Dusit Medical Services were among the largest drags on the benchmark. Equity selling in the country was exacerbated by the central bank's steps to curb short-term speculative capital flows in a bid to weaken the baht. A stronger local currency hurts the country's exports. Singapore stocks closed slightly higher as investors bet on equities benefiting from local monetary policy easing. Seven of 11 economists surveyed by Reuters expect the central bank to ease policy in October after the island state saw its slowest economic expansion in a decade for the second quarter. For Asian Companies click; SOUTHEAST ASIAN STOCK MARKETS Change on the day Market Current Previous close Pct Move Singapore 3357.34 3350.45 0.21 Bangkok 1731.59 1740.45 -0.51 Manila 8141.82 8154.49 -0.16 Jakarta 6373.345 6417.066 -0.68 Kuala Lumpur 1669.45 1679.26 -0.58 Ho Chi Minh 975.4 978.63 -0.33 Change on year Market Current End 2018 Pct Move Singapore 3357.34 3068.76 9.40 Bangkok 1731.59 1563.88 10.72 Manila 8141.82 7466.02 9.05 Jakarta 6373.345 6194.498 2.89 Kuala Lumpur 1669.45 1690.58 -1.25 Ho Chi Minh 975.4 892.54 9.28 (Reporting by Ambar Warrick in Bengaluru; Editing by Subhranshu Sahu)

Australian shares set for strong week on easier monetary policy; NZ at record high

05 Jul 2019

July 5 Australian shares edged up on Friday and were set for strong weekly gains as easier monetary policy and recent strength in commodity prices helped lift the largest sectors on the index.

Australian shares surge to highest since Nov 2007; NZ at another peak

04 Jul 2019

July 4 Australian shares surged to their highest in more than 11-1/2 years on Thursday as further signs of weakness in the U.S. economy raised expectations the Federal Reserve will start cutting interest rates.

Australian shares buoyed by miners and real estate stocks; NZ inches up to record

03 Jul 2019

* New Zealand ends at second consecutive record high (Updates to close)

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