(Updates prices, adds analyst comment) By Sruthi Shankar June 14 Latin American stocks fell nearly 2% on Friday, mirroring weakness on Wall Street, while the Brazilian real dropped as optimism around the proposed overhaul of the country's pension system faded. The real fell 1% to 3.89 per dollar after Brazil's Economy Minister Paulo Guedes expressed his disappointment with a congressional committee's report on pension reform, saying it made more changes to the government's original proposals than he had expected. The currency was on track to give back all of its gains from Thursday when the report was released. The report showed the overhaul would help generate savings of 913.4 billion reais ($237 billion) over the next decade. In addition, a central bank indicator showed economic activity unexpectedly fell in April, marking the longest stretch of declining activity since the last recession in 2016. "It's (Guedes' comments) making investors nervous and leading to some weakness in the real," said Alejo Czerwonko, emerging markets strategist at UBS Global Wealth Management. "This should be interpreted as a part of the ebbs and flows in the approval process and ultimately doesn't alter the baseline scenario that a reform will be approved this year." Broad gains for the dollar after encouraging U.S. retail sales data also knocked developing world currencies lower. Investors are squaring up for a U.S. central bank meeting next week where policymakers might hint when they plan to cut interest rates, the prospect of which has supported risky assets in the recent weeks. The Mexican peso gained 0.3%, still benefiting from the announcement of a deal between Mexico and the United States that averted tariffs on its goods. The Chilean, the Colombian and the Argentine pesos all weakened. Stocks in the region fell, tracking a weak session for Wall Street's main indexes after U.S. chipmaker Broadcom slashed sales forecasts due to the U.S.-China trade war and weak industrial output data out of China. The MSCI index of Latin American stocks was on track to post its biggest percentage drop in a month. Sao Paulo-traded stocks were down about 1% as major banks fell for a second day on expectations of higher taxes, while Mexico's main stock index slid nearly 1%. Key Latin American stock indexes and currencies at 1941 GMT Stock indexes daily % Latest change MSCI Emerging Markets 1014.12 -0.78 MSCI LatAm 2743.89 -1.69 Brazil Bovespa 97813.86 -0.97 Mexico IPC 43024.66 -1.05 Chile IPSA 5043.61 -0.56 Argentina MerVal 40693.57 0.12 Colombia IGBC 12291.06 0.03 Currencies daily % change Latest Brazil real 3.8925 -0.99 Mexico peso 19.1417 0.24 Chile peso 699.8 -0.54 Colombia peso 3268.25 -0.04 Peru sol 3.346 -0.48 Argentina peso 43.9500 -1.32 (interbank) (Reporting by Sruthi Shankar in Bengaluru Editing by Susan Thomas)
Trade-sensitive technology stocks led losses in European markets on Friday after U.S. chipmaker Broadcom's sales warning and disappointing industrial data out of China came as the clearest signs yet of the damage trade war may do to global growth. | Video
By Sruthi Shankar June 14 An index of Latin American stocks fell more than 1% on Friday, mirroring weakness on Wall Street, while Brazil's real dropped as optimism around the proposed overhaul of the country's pension system faded and weak economic data weighed. The real fell 0.8% to 3.88 per dollar level as the government's proposals to raise the minimum retirement age and workers' contributions to help restore public finances are drawing fierce opposition and look likely to fall short of what President Jair Bolsonaro's government was seeking. The currency was on track to give back all of its gains from Thursday when a congressional report showed the overhaul would help generate savings of 913.4 billion reais ($237 billion) over the next decade. In addition, a central bank indicator showed economic activity unexpectedly fell in April, marking the longest stretch of declining activity since the last recession in 2016. "In our view, a big disappointment in the final expected cost-savings from the pension reform could take BRL (the real) towards the level of 5.0 against the USD," Rabobank analysts wrote in a note. While analysts added the likelihood of such scenarios were dimming, "adverse global conditions are expected to affect EM (emerging market) assets and economies, limiting the room for a more pronounced BRL rally." Broad gains for the dollar after encouraging U.S. retail sales data also limited gains for emerging market currencies. Investors are squaring up for a U.S. central bank meeting next week where policymakers might hint when they plan to cut interest rates, the prospect of which has supported risky assets in the recent weeks. The Mexican peso was marginally higher at the end of a week in which the currency outperformed after a deal was struck with United States that averted tariffs on Mexican goods. But the Chilean, the Colombian and the Argentine pesos all weakened. Stocks in the region were also hit following a weak open for Wall Street's main indexes after U.S. chipmaker Broadcom slashed sales forecasts because of the escalating U.S.-China trade war and weak industrial output data out of China. The MSCI index of Latin American stocks dropped about 1%. Sao Paulo-traded stocks were down 0.4% as major banks fell on expectations of higher taxes, while Mexico's main stock index slid 0.3%. Key Latin American stock indexes and currencies at 1925 GMT Stock indexes daily % Latest change MSCI Emerging Markets 1015.55 -0.64 MSCI LatAm 2759.98 -1.11 Brazil Bovespa 98401.29 -0.38 Mexico IPC 43350.72 -0.3 Chile IPSA 5061.56 -0.2 Argentina MerVal - - Colombia IGBC 12276.52 -0.08 Currencies daily % change Latest Brazil real 3.8841 -0.78 Mexico peso 19.1545 0.17 Chile peso 697.8 -0.26 Colombia peso 3268.94 -0.07 Peru sol - - Argentina peso 43.6500 -0.64 (interbank) (Reporting by Sruthi Shankar in Bengaluru)
(Updates prices; adds details on Argentina's markets) By Sruthi Shankar June 13 The Brazilian real firmed and stocks climbed on Thursday, as investors welcomed a report on the government's proposal to overhaul the country's pension system. The real rose about 0.4% while Sao Paulo-listed stocks also gained 0.4% to touch a near three-month high after Brazil's congressional pension reform bill coordinator Samuel Moreira said the proposed changes would generate savings of 913.4 billion reais ($237 billion) over the next decade. The committee had targeted savings of between 800 billion and 1 trillion reais through a range of measures, including raising the minimum retirement age and increasing workers' contributions. The bill will now be debated, voted on and sent to the lower house plenary for a vote. If passed in the form Moreira presented on Thursday, it will likely be seen as a success for the administration. The real had risen as much as 0.9% earlier in the session and stocks were up nearly 1%. "All indications suggest that pension reform remains on track and may leave the committee with greater savings than the consensus expected," Dirk Willer, head of emerging market strategy at Citi Research, and Kenneth Lam, an emerging markets FX strategist, wrote in a note. The social security overhaul is a cornerstone of President Jair Bolsonaro's economic agenda, aimed at shoring up dire public finances and restoring investor confidence to kickstart an economic recovery. Most other currencies in the region, including the Mexican , Colombian and Chilean pesos made tepid moves against the U.S. dollar as concerns about U.S.-China trade tensions and the Federal Reserve's upcoming monetary policy meeting remained a focus. The Argentine peso advanced for a third day in a sign of approval from markets after President Mauricio Macri picked a moderate running mate that could broaden his voter base in elections to be held later this year. Argentina's official statistics agency INDEC said consumer prices rose 3.1% in May, in line with a Reuters poll of economists, keeping accumulated inflation in 12 months through May at 57.3%. Among stocks, a more than 2% jump in oil prices helped shares in Brazil's state-run oil company Petróleo Brasileiro SA gain over 1% and boost the Bovespa index. The commodity's price got a boost following a suspected attack on two tankers in the Gulf of Oman near Iran and the Strait of Hormuz, through which a fifth of global crude oil passes. Colombia's local stocks tacked on 0.66%, with energy firm Ecopetrol SA riding on the back higher oil prices . Bank stocks were a drag in Brazil, with shares of Bradesco and Itau Unibanco falling more than 1% on the prospect of higher taxes for financial institutions. Company news drove shares in Brazilian petrochemical producer Braskem, which rose nearly 3% after it said an appeals court overturned a decision blocking dividend payments. Brazilian food processor BRF SA jumped 5% to the top of Bovespa after J.P. Morgan upgraded the company to "overweight" from "neutral". Key Latin American stock indexes and currencies at 1945 GMT Stock indexes Latest Daily pct change MSCI Emerging Markets 1,021.87 -0.43 MSCI LatAm 2,785.63 -0.35 Brazil Bovespa 98,741.76 0.43 Mexico IPC 43,413.39 -0.88 Chile IPSA 5,074.46 0.13 Argentina MerVal 40,748.20 -0.45 Colombia IGBC 12,314.04 0.8 Currencies Latest Daily pct change Brazil real 3.8546 0.35 Mexico peso 19.1584 0.04 Chile peso 696 -0.09 Colombia peso 3,263.54 0.06 Peru sol 3.33 -0.03 Argentina peso (interbank) 43.3000 0.92 (Reporting by Sruthi Shankar in Bengaluru; Editing by Sandra Maler)
Gains for metal and mining companies helped European stocks end slightly higher on Thursday, with concerns over an attack on tankers in the Gulf of Oman and continuing U.S.-China trade tensions sapping early enthusiasm among investors. | Video
(Recasts throughout; updates prices, adds quote) By Sruthi Shankar June 12 Argentine stocks surged to all-time highs on Wednesday and the peso firmed over 2% as investors cheered President Mauricio Macri's choice of a moderate running mate that could broaden his voter base in the elections to be held later this year. Buenos Aires' main Merval stock index jumped 6%, rising across the board, while the peso climbed to over a one-month high against the dollar and over-the-counter bonds gained. In a series of tweets, Macri, a center-right former businessman whose popularity has been hit by a flagging economy and high inflation, said moderate Argentine Senator Miguel Pichetto will run as his vice-presidential candidate. "While the presidential race is likely to remain tight in the months to come, Pichetto's nomination improves the chances of policy continuity," Morgan Stanley analysts wrote in a client note. "Overall, we expect local assets to remain stable in the near term, as the recent sell-off in rates should help carry to stay supported." Argentine markets were a bright spot in Latin America, with a broadly firming U.S. dollar adding pressure on the Mexican peso, which gave back some gains made on Washington's decision to hold off tariffs on Mexican goods. The MSCI index of Latin American currencies has gained nearly 2% so far in June, with the dollar dented by hopes that the Federal Reserve will cut interest rates to spur global economic growth in the wake of the trade war with China. However, the greenback on Wednesday held steady after U.S. President Donald Trump expressed optimism over making a trade deal with China, although he said he would hold up a deal unless China agreed to four or five major points. Heading into the G20 summit to be held at the end of this month, some profit-taking among emerging markets currencies could be expected, analysts at Citigroup said a note. Trump has said he is ready to impose another round of tariffs on Chinese goods if no progress is made in talks with Chinese President Xi Jinping at the summit. Colombia's peso fell 0.26%, its first decline in five days, hit by a slump in oil prices. Chile's peso also ticked lower as prices of copper, the country's main export, fell. Among stocks, Brazil's Bovespa fell nearly 1% after hitting 12-week highs in early trade as iron ore and oil majors were hit by falling prices of crude and iron ore, which is used to make steel. Shares in state-run oil company Petroleo Brasileiro SA fell over 1%, while steelmaker Companhia Siderurgica Nacional tumbled nearly 6% after Morgan Stanley downgraded the stock to "equal-weight" from "overweight." Key Latin American stock indexes and currencies at 1948 GMT: Stock indexes daily % Latest change MSCI Emerging Markets 1024.25 -0.74 MSCI LatAm 2772.44 -0.68 Brazil Bovespa 97997.50 -0.97 Mexico IPC 43798.40 0.19 Chile IPSA 5057.11 -0.24 Argentina MerVal 40630.52 5.96 Colombia IGBC 12234.92 -0.71 Currencies daily % change Latest Brazil real 3.8678 -0.50 Mexico peso 19.2198 -0.49 Chile peso 695.4 -0.39 Colombia peso 3265.63 -0.33 Peru sol 3.329 -0.09 Argentina peso 43.6500 2.43 (interbank) (Reporting by Susan Mathew in Bengaluru; Editing by Susan Thomas and Leslie Adler)
Weakness in oil companies and banks halted a week long rally in European shares on Wednesday, as soft Chinese factory activity data and Washington's tough stance on trade talks with Beijing prompted investors to cash in some of June's gains.
(Recasts throughout; updates prices, adds market strategist's quote) By Sruthi Shankar June 11 An index of Latin American stocks touched a two-month high on Tuesday and currencies in the region firmed on easing U.S.-Mexico trade tensions and as signs of more stimulus for China's slowing economy spurred a rally in commodity prices. The MSCI index of Latin American stocks jumped 1.8%, hitting the highest level since April 12. Brazil's Bovespa stock index jumped 1.5%, as iron ore prices rallied on supply concerns and China's move to boost funding for major investment projects helped stock prices of energy and commodity heavyweights. Iron ore miner Vale's shares jumped nearly 6%, posting their biggest percentage gain since Jan. 30. Shares in Petroleo Brasileiro SA gained nearly 2% after Brazil's state-controlled oil company said it had signed a deal with local antitrust regulator CADE regarding the proposed sale of some of its refining installations. Brazil's real firmed nearly 1% after news the country's federal budget committee approved a supplementary credit worth 248.9 billion reais ($64.62 billion) to ensure the government can make payments for social programs and meet other expenses. The bill, which is expected to be up for a vote in a joint session of Congress later Tuesday, is a priority for the government, currently struggling to repair what most economists call an unsustainable public deficit. The gains reflect a rebound for real which was hit on Monday by political tensions. The Mexican peso extended gains after logging its biggest percentage gain in 2019 on Monday on news that Mexico and the United States had struck a migration deal that averted U.S. tariffs of an initial 5% that were set to take effect this week. "Mexican peso definitely benefits from the lowering of trade tensions and that's probably helping the rest of emerging markets as well," said Win Thin global, head of currency strategy at Brown Brothers Harriman in New York. "Commodity prices rising is at the margin positive for stocks." The dollar was on the back foot as investors focused on the upcoming G20 summit for any progress on the U.S.-China trade war that has weighed on global growth. U.S. President Donald Trump said he was ready to impose another round of tariffs on Chinese imports if no progress is made in trade talks with Chinese President Xi Jinping at the G20 summit later this month. A bounce in prices of copper - Chile's main export - put its currency on course to erase Monday's near 1% decline posted on a surprise 50 basis point rate cut by the central bank late on Friday. The Argentine peso rose 0.4%, while the Merval stock index jumped 2.7%, inching toward an all-time high hit in mid-February. Key Latin American stock indexes and currencies at 1950 GMT: Stock indexes daily % Latest change MSCI Emerging Markets 1,032.57 1.03 MSCI LatAm 2,795.73 1.8 Brazil Bovespa 98,932.22 1.5 Mexico IPC 43,680.07 0.16 Chile IPSA 5,086.13 1.34 Argentina MerVal 37,604.56 3.16 Colombia IGBC 12,244.83 0.93 Currencies daily % change Latest Brazil real 3.8508 0.85 Mexico peso 19.1295 0.46 Chile peso 692.7 0.95 Colombia peso 3,257 -0.04 Peru sol 3.326 0.21 Argentina peso (interbank) 44.6950 0.45 (Additional reporting by Susan Mathew in Bengaluru; Editing by Will Dunham and Alistair Bell)
European stocks finished higher for a third day on Tuesday, as German shares caught up with a global stock rally after a holiday on easing trade tensions, while fresh stimulus for China's slowing economy boosted the basic resources sector. | Video
(Recasts with Latin American currencies, updates prices, adds market strategists' quote) By Sruthi Shankar June 10 The Mexican peso was on track on Monday to post its biggest one-day percentage gain of 2019 after the country struck a migration deal with the United States to avoid higher tariffs on its exports, although a firm dollar kept other Latin American currencies under pressure. The peso, which has shed more than 2.5% since U.S. President Donald Trump's threat last month to impose 5% levies on all Mexican goods from Monday, recouped much of the losses to trade up 2.3% at 19.18 per dollar. Worries that Latin America's second-largest economy could slip into a recession if Trump made good on his promise to impose tariffs have sent shivers through financial markets already reeling from a U.S.-China trade dispute. "It seems to me in the short term, the peso is well-positioned to go back to the 19 (per dollar) level," said Bertrand Delgado, emerging market strategist with Societe Generale in New York. Mexico on Friday agreed to rapidly expand a controversial asylum program and deploy security forces to stem the flow of illegal Central American migrants. Trump did not provide details of the deal reached last week, but threatened tariffs if Mexico's Congress did not approve the plan. "The trade news is obviously a positive, but as we go into the second half, we might start seeing some weakening pressure from the economy continuing to slowdown and the central bank might move toward a more dovish stance toward the end of the year," Delgado said. Stocks in Mexico shrugged off the trade threats to trade up 0.34%. Elsewhere, Brazil's real was tepid against the dollar, which rebounded from last week's lows. Political tensions also added to the woes after a news website published messages dating back years showing Brazil's Justice Minister Sergio Moro closely coordinating with prosecutors working on the "Car Wash" investigations, that included a case that convicted and imprisoned former President Luiz Inacio Lula da Silva. "These new revelations may result in a delay in Congress' pension reform debate," Peter Cecchini, chief market strategist at Cantor Fitzgerald, wrote in a research note. Brazil's Bovespa stock index edged down 0.15%, hurt by losses in the financial sector, also sensitive to news on the country's pension reforms. Shares of Banco Bradesco SA and Itau Unibanco fell 1.2% each after Goldman Sachs started coverage on the banks with a "sell" rating, saying valuations and earnings estimates appeared too high. Chile's peso declined 1.0% after its central bank unexpectedly cut the benchmark interest rate by 50 basis points to 2.5% on Friday as it braced for a sharper economic slowdown because of the U.S.-China trade dispute. The bank also trimmed its estimate for the average price of copper for 2019-21, citing the impacts the trade war on its top export. Key Latin American stock indexes and currencies at 1921 GMT: Stock indexes Latest Daily pct change MSCI Emerging Markets 1,022.51 1.5 MSCI LatAm 2,749.23 0.14 Brazil Bovespa 97,669.69 -0.15 Mexico IPC 43,437.78 0.34 Chile IPSA 5,011.90 1.23 Argentina MerVal 36,323.43 1.85 Colombia IGBC 12,277.26 0.19 Currencies Daily pct Latest change Brazil real 3.8773 -0.01 Mexico peso 19.1790 2.25 Chile peso 698.8 -1.00 Colombia peso 3,255.64 0.33 Peru sol 3.333 -0.18 Argentina peso (interbank) 44.8750 0.01 (Reporting by Sruthi Shankar in Bengaluru, editing by G Crosse)
Hundreds of thousands of people clogged the streets in central Hong Kong on Sunday dressed in black to demand the city's leader step down, a day after she suspended an extradition bill in a dramatic retreat following the most violent protests in decades.