Emerging Markets: Latam stocks fall on Brazil weakness, currencies mixed after US data

Ambev SA

29/02/2024 21:29

* 
      U.S. inflation rose in-line with expectations
    

        * 
      Brazil's Ambev falls after Q4 profit miss
    

        * 
      Argentina economy chief: No talks underway over new IMF
program
    

        * 
      Stocks down 0.5%, FX flat 
    

  
 (Updated at 3pm ET/2000 GMT)
    By Shashwat Chauhan
       Feb 29 (Reuters) - 
    Latin American currencies were mixed on Thursday, as
investors digested a widely anticipated U.S. inflation reading,
while stocks in the region lost ground on weakness in Brazilian
shares.
    MSCI's basket of Latin American stocks  .MILA00000PUS 
dropped 0.3% as Brazil's main stock index  .BVSP  fell 1%,
weighed on by losses in financial and energy stocks. 
    Mexican shares  .MXX  advanced 0.4%, while Colombian stocks
fell 0.7%. 
    MSCI's gauge for Latin American currencies  .MILA00000CUS 
was flat. It was on track to rise 0.3% in February. 
    Brazil's real  BRL=  was flat at 4.9673 per dollar after
data showed the country's unemployment rate for the first
quarter came in below market expectations, with the closely
watched average wages metric up 3.8% year-on-year. 
    "The behavior of real wages reinforces our call that
services disinflationary process will remain sticky, narrowing
room for Selic rate cuts with a 10% terminal rate," Citi
economists wrote in a note.
    Brazil's central bank cut benchmark interest rates for the
fifth consecutive time to 11.25% in January. 
    The dollar index  =USD  weakened after data showed U.S.
price pressures picked up in January about in line with
expectations, keeping a June interest rate cut from the Federal
Reserve in play. 
    "Inflation continues to moderate despite upgraded outlooks
for the U.S. economy ... today's numbers show just enough
softening to keep worries at bay," David Russell, global head of
market strategy at TradeStation said. 
        The Latin American stocks index was on pace to lose 0.6%
in February after volatile trading on regional bourses through
the month as investors reassessed expectations for Fed rate
cuts.
  
        Latin American stocks in February lagged MSCI's broader
emerging markets stock index  .MSCIEF , which clocked monthly
gains of 4.6% as gains in technology stocks and moves by Chinese
policymakers to shore up the world's second largest economy
lifted sentiment. 
  
    On the day, the Mexican peso  MXN=  rose 0.3% and was on
track to be the best monthly performing currency amongst local
peers. 
    Data showed Mexico's seasonally adjusted unemployment rate
stood at 2.8% in January. 
    Higher copper prices helped top producer Chile's peso  CLP= 
rise 1%, though it was on track to lose nearly 4% in Feb. 
    Chile's SQM   SQM.SN  rose nearly 3% after the world's
second largest-lithium producer said it expects steady prices of
the metal in the coming months. 
    Argentinian stocks gained 1.2% while the peso on informal
parallel market  ARSB=  traded at 1010 to the dollar.
        The country's economy minister denied reports that talks
were underway on a new loan 
    deal
     with the International Monetary Fund, Argentina's largest
debtor. 
  
    
    HIGHLIGHTS
    ** India's economy grows at its fastest pace in six quarters
in election boost for Modi
    
    Key Latin American stock indexes and currencies at 2000 GMT:
    
    
                              Latest    Daily %
                                         change
 MSCI Emerging Markets         1020.38      0.16
  .MSCIEF                               
 MSCI LatAm                    2519.69     -0.49
  .MILA00000PUS                         
 Brazil Bovespa              128734.25     -1.09
  .BVSP                                 
 Mexico IPC                   55561.80      0.38
  .MXX                                  
 Chile IPSA                    6449.88      1.66
  .SPIPSA                               
 Argentina MerVal           1011202.41     1.238
  .MERV                                 
 Colombia COLCAP               1276.65     -0.69
  .COLCAP                               
                                                
       Currencies             Latest    Daily %
                                         change
 Brazil real        BRBY        4.9711      0.00
                                        
 Mexico peso                   17.0482      0.24
  MXN=D2                                
 Chile peso       CLP=CL         965.5      1.06
                                        
 Colombia peso  COP=            3923.6     -0.02
 Peru sol         PEN=PE        3.7683      0.40
                                        
 Argentina peso               842.3000     -0.06
 (interbank)  ARS=RASL                  
                                        
 Argentina peso                   1010      3.47
 (parallel)  ARSB=                      
                                        
 


 (Reporting by Shashwat Chauhan and Lisa Mattackal in Bengaluru;
Editing by Chizu Nomiyama and Marguerita Choy)
 ((Shashwat.Chauhan@thomsonreuters.com;))