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Ambar Warrick

London stocks surge as recovery optimism buoyed by robust data

9:49pm IST

UK shares closed at three-month highs on Wednesday as better-than-expected data from the world's two largest economies pointed to an ongoing economic recovery from the coronavirus.

UPDATE 2-London stocks surge as recovery optimism buoyed by robust data

9:42pm IST

* Defence contractor Chemring soars after winning U.S. orders (Adds details, updates to close)

EMERGING MARKETS-Brazil leads Latam rally; Argentina extends debt deadline

12:33am IST

* Brazil's real at over 6-week high * Mexican, Colombian pesos buoyed by strong oil prices * Argentina extends debt restructuring deadline to June 12 * Analysts see Mexican peso outperforming in near-term (Adds details, updates prices) By Susan Mathew and Ambar Warrick June 2 Latin American currencies rallied on Tuesday with Brazil's real and stocks leading gains as hopes for a recovery from a deep recession buoyed sentiment. Brazil's Bovespa index scaled 12-week highs, while the real jumped more than 3% to the dollar as the country's government launched a new emergency credit line of 20 billion reais ($3.73 billion) to help small and mid-size companies. While easing coronavirus lockdowns, and no immediate fallout from escalating U.S.-China tensions, have helped Latin American assets recoup some of their losses this year, there are still concerns over the full extent of the COVID-19 pandemic. The economic outlook for Latam's largest economy remains bleak, with the country's treasury department expecting Brazil to end 2020 with debt at 94% of GDP unless the government shows commitment to fiscal reforms. An ongoing federal investigation into Brazilian President Jair Bolsonaro has added to woes. The speaker of Brazil's lower house of Congress on Monday did not dismiss the possibility of opening impeachment proceedings against Bolsonaro. Mexico's peso rose 2%, touching an 11-week high against a weaker dollar. The peso has gained about 10% over past 12 sessions with analysts expecting the currency to outperform regional peers in the short term. Given that monetary and fiscal measures have postponed near-term funding distress, it is possible to position for a recovery in emerging markets from March lows, said Goldman Sachs analysts, pointing to the Mexican peso and the Bovespa as Latam beneficiaries. Rising oil prices also helped the Mexican peso, while crude exporter Colombia saw its peso come near three-month highs. Argentina, meanwhile, extended the deadline to restructure $65 billion in debt to June 12 and said it may sweeten its most recent offer to creditors. The country is already in default after having missed an interest payment extension on May 22. The government may improve its offer less than what creditors expect, given the International Monetary Fund's backing for its current deal terms, Citigroup analysts said. "But this argument is unlikely to be very effective as the IMF's debt sustainability assessment treats Argentina's macroeconomic policies as exogenous, which is obviously not the case." Concerns also stem from the widening gap between the official and black market rate of the Argentine peso. The currency is being held artificially high by strict currency controls, even as fears over the economy and demand for dollars drive unofficial rates to record lows. Key Latin American stock indexes and currencies: Stock indexes Latest Daily % change MSCI Emerging Markets 967.19 1.65 MSCI LatAm 1889.43 3.74 Brazil Bovespa 90390.25 2 Mexico IPC 37426.52 1.21 Chile IPSA 3748.69 1.71 Argentina MerVal 41424.63 3.518 Colombia COLCAP 1115.74 -0.11 Currencies Latest Daily % change Brazil real 5.2187 3.12 Mexico peso 21.7808 1.12 Chile peso 780.2 1.70 Colombia peso 3635.26 2.06 Peru sol 3.3947 0.74 Argentina peso 68.7100 -0.12 (interbank) (Reporting by Susan Mathew in Bengaluru; Editing by Tom Brown)

London stocks end at near three-month highs on recovery hopes

02 Jun 2020

UK shares ended at near three-month highs on Tuesday amid continued bets on government stimulus and easing lockdowns helping a swifter economic recovery from the coronavirus crisis.

UPDATE 2-London stocks end at near 3-month highs on recovery hopes

02 Jun 2020

* London bluechips, midcaps at strongest close since early-March

EMERGING MARKETS-Latam stocks track broader rally; Brazil's real dips

02 Jun 2020

* Real drops as economic outlook deteriorates * Colombian central bank minutes expected * Brazilian, Mexican manufacturing PMI come off record lows in May (Adds details, updates prices) By Susan Mathew and Ambar Warrick June 1 Latin American stocks rose on Monday, tracking their global peers amid some relief over Sino-U.S. tensions, while Brazil's real fell on further concerns over the country's economic outlook. The MSCI's index of regional shares rose 2.6% as Washington stopped short of imposing new tariffs or sanctions on Beijing and left their so-called Phase 1 trade deal intact while responding to China's new security law on Hong Kong. But sources said China has asked state-owned firms to halt purchases of soybeans and pork from the United States, after U.S. President Donald Trump moved to revoke Hong Kong's special status under U.S. law. Still, the lack of any immediate escalation in tensions saw Brazilian stocks add 1.7%, while those in Mexico and Chile rose 2.3% and 1.5%, respectively. Surging iron ore prices buoyed Brazilian mining giant Vale , while planemaker Embraer SA rose after it said China and India could be new partners after its deal with Boeing Co fell apart. Brazil's real fell 0.9% after a central bank survey showed the 2020 outlook for the economy deteriorated for a 16th week in a row, to a new consensus of a 6.25% contraction. Still, data showed manufacturing activity in Latin America's largest economy improved slightly in May from record lows, pointing to some headway in an eventual, but arduous recovery from disruptions caused by the coronavirus outbreak. Mexico's peso firmed 0.4% as the country's manufacturing sector showed a similar trend as Brazil in May. Chile's peso traded higher tracking gains in the price of copper, the country's top export. Colombia's peso traded slightly higher to the dollar, while stocks added more than 1% ahead of the central bank's minutes from its May 29 policy meeting, when it had cut interest rates to a record low 2.75%. "Given the severe negative economic impact, downside risks to inflation, and favorable exchange rate dynamics, we continue to believe the MPC (Colombia's Monetary Policy Committee) will cut the policy rate further to a 2.25% terminal level," Goldman Sachs analysts wrote in a note. "However, while we see another 50bp cut in June as the most likely next step, the latest split decision has increased the risk of a smaller 25bp cut at the next meeting." A rash of fiscal and monetary policy support has helped emerging markets rally from March lows on hopes of an economic recovery. Latin American stock indexes and currencies: Stock indexes Latest Daily % change MSCI Emerging Markets 951.67 2.29 MSCI LatAm 1820.04 2.56 Brazil Bovespa 88900.01 1.71 Mexico IPC 36972.46 2.35 Chile IPSA 3700.67 1.45 Argentina MerVal 39330.22 3.98 Colombia COLCAP 1109.50 1.25 Currencies Latest Daily % change Brazil real 5.3880 -0.91 Mexico peso 22.0735 0.43 Chile peso 793.5 1.64 Colombia peso 3718.57 0.20 Peru sol 3.4197 0.21 Argentina peso 68.6200 -0.12 (interbank) (Reporting by Susan Mathew in Bengaluru; editing by Grant McCool and Tom Brown)

London stocks rise as coronavirus lockdowns begin to ease

01 Jun 2020

London-listed shares ended higher on Monday as markets took heart from a scaling back of coronavirus restrictions, with consumer stocks among the best performers.

UPDATE 2-London stocks rise as coronavirus lockdowns begin to ease

01 Jun 2020

* UK retail opening in focus (Adds details, updates to close)

EMERGING MARKETS-Latam assets slip on China-U.S. tensions, but gain in May

30 May 2020

* MSCI Latam stocks index up 6% in May * Mexican shares slide more than 2% * Mexican peso flat on pressure from oil prices (Adds details, updates prices) By Susan Mathew and Ambar Warrick May 29 Most Latin American stocks and currencies declined on Friday after the United States outlined its response to China's security law on Hong Kong, but were up for the month on optimism about major economies emerging from coronavirus lockdowns. U.S. President Donald Trump said he was directing his administration to begin the process of eliminating special treatment for Hong Kong in response to China's plans to impose new security legislation in the territory. An escalation in U.S.-China trade tensions has the capacity to further weigh on the global economy, which is already in dire straits due to the novel coronavirus pandemic. The MSCI's index of Latin American stocks slid 0.6% for the day, while the currencies index retreated slightly. Still, the two indexes gained for the month as investors bet on some measure of economic normalcy, with parts of the United States and Europe scaling back curbs on social and business activity. Latin American assets also outperformed their broader emerging market peers in May. For the day, Brazilian stocks were flat, while Mexican equities fell more than 2%. Colombia's peso eased off 12-week highs after the central bank cut the benchmark interest rate for the third consecutive month by 50 basis points to a historic low of 2.75% in an effort to prop up the economy amid the pandemic. The Mexican peso traded flat, pressured by a decline in oil prices. Citi analysts expect two more half-percentage-point interest rate cuts in Mexico, one in June and one later in the second half of the year, with the risk leaning to more. Brazil's real rose nearly 1% despite data showing the economy contracted in the first quarter as the coronavirus outbreak in March triggered the steepest quarterly drop in almost five years. The currency looks to end three months of losses in May. Brazil's central bank has not exhausted its monetary policy options, but it should be skeptical of reducing interest rates close to zero or printing money to buy bonds and finance the government deficit, the country's central bank chief said. In Argentina, Economy Minister Martin Guzman said a new proposal from bondholders to revamp around $65 billion in debt had been a step in the "right direction," but still fell short of what the country needed to dig itself out from its debt crisis amid a lengthy recession. Key Latin American stock indexes and currencies: Stock indexes Latest Daily % change MSCI Emerging Markets 929.89 0.49 MSCI LatAm 1779.85 -0.6 Brazil Bovespa 86983.98 0.04 Mexico IPC 35983.45 -1.44 Chile IPSA 3607.30 -1.39 Argentina MerVal 37918.95 -2.737 Colombia COLCAP 1068.91 -1.53 Currencies Latest Daily % change Brazil real 5.3310 0.99 Mexico peso 22.1670 0.23 Chile peso 806.5 0.16 Colombia peso 3726 -0.94 Peru sol 3.4268 0.29 Argentina peso 68.5300 -0.12 (interbank) (Reporting by Susan Mathew in Bengaluru; Editing by Marguerita Choy and Paul Simao)

UK stocks end lower on Sino-U.S. tensions, but mark monthly gains

29 May 2020

UK shares ended lower on Friday as fears of Washington's response to Beijing tightening its control over Hong Kong tempered optimism over an eventual economic recovery from the coronavirus crisis.

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