Emerging Markets: Latin American FX, stocks set for weekly losses as commodities stall

MercadoLibre

23/02/2024 21:10

* 
      Brazil's Vale advances after Q4 results
    

        * 
      Mexico's Femsa falls after Q4 profit drop
    

        * 
      Stocks down 1.3%, FX eases 0.6%
    

  
 (Updated at 3pm ET/2000 GMT)
    By Shashwat Chauhan and Lisa Pauline Mattackal
       Feb 23 (Reuters) - 
    Most stock indexes and currencies in Latin America dropped
on Friday as declines in oil and metals prices weighed on the
resource-rich region, capping a choppy week of trading that has
seen it broadly lag global emerging markets. 
    MSCI's Latin American currencies  .MILA00000CUS  gauge was
down 0.6%, its worst day in nearly three weeks, set for a weekly
fall of 0.3%.
        A gauge of Latin American stocks  .MILA00000PUS  dropped
1.3%, with heavyweight Brazil's main stock exchange  .BVSP 
losing 0.7% amid weakness in financial and energy shares. 
  
        Oil prices dropped over 2% after the U.S. central bank
indicated interest rate cuts could be further delayed, raising
concerns about commodity demand.  O/R 
  
        Latin American assets have see-sawed this week as
investors tempered interest rate cut expectations from the U.S.
Federal Reserve amid signs of economic resilience in the world's
biggest economy. 
  
        The region lagged broader emerging markets, which gained
as China took broad steps to boost the country's property sector
and economy, and as a global tech stock rally lifted Asian
bourses.  MKTS/GLOB  
  
        "With Fed expectations on the up again, it could get
tricky for Latin America," said Geoff Yu, senior EMEA Market
Strategist at BNY Mellon. 
  
        Global emerging market stocks  .MSCIEF  rose for the
fifth consecutive week, up 1.2% for the week. Latin American
stocks lost 0.7%.   
        LSEG data showed emerging market 
    equity funds
     attracted $269 million in the week to Feb. 21. However bond
funds saw $1.1 billion worth of outflows. 
  
    On Friday, Brazil's real  BRL=  fell 0.7% and Colombia's
peso  COP=  dropped 0.8%. Both currencies touched over two-week
lows, while Mexico's peso  MXN=  lost 0.1%. 
    Easing inflation data on Thursday and minutes from the
central bank's last meeting reinforced expectations that
Mexico's central bank was on track to cut interest rates soon. 
        However, strategists at Macquarie said "there's no
urgency to ease in view of the economy's strength in Q1 and the
uncertainty posed by the US and Mexico elections." 
  
        Declining copper prices weighed on currencies of top
producers, with Chile's peso  CLP=  down 0.3% to 981.2 per
dollar, its lowest since October 2022. 
    Chile's  LATAM Airlines lost over 5%  LTM.SN  after
reporting a 95% year-on-year fall in net profit in the fourth
quarter on Thursday. 
    Mexico's benchmark index  .MXX  lost 0.9%, with retailer
Femsa's  FEMSAUBD.MX  plunging 11.5% after posting a 17.7%
year-on-year fall in fourth-quarter net profit.
    Shares in Argentina  .MERV  rose 2.7% on the day, while
Colombian stocks rose 0.8%.   
    
    HIGHLIGHTS
    ** Egypt to announce new investment to boost forex, bonds up
    ** MercadoLibre's U.S. market cap sheds $9 bln after flat
fourth quarter 
        ** 
    Argentina markets
     double down on Milei as investors 'start to believe
  
    
    Key Latin American stock indexes and currencies at 2000 GMT:
    
   Stock indexes            Latest    Daily % change
 MSCI Emerging Markets       1028.55           -0.09
  .MSCIEF                             
 MSCI LatAm                  2537.85           -1.25
  .MILA00000PUS                       
 Brazil Bovespa            129820.75           -0.32
  .BVSP                               
 Mexico IPC                 56766.18           -0.67
  .MXX                                
 Chile IPSA                  6240.78            0.05
  .SPIPSA                             
 Argentina MerVal         1052429.30          -2.193
  .MERV                               
 Colombia COLCAP             1272.34           -0.53
  .COLCAP                             
                                                    
       Currencies           Latest    Daily % change
 Brazil real                  4.9942           -0.85
  BRBY                                
 Mexico peso                 17.1264           -0.17
  MXN=D2                              
 Chile peso                    983.5           -0.51
  CLP=CL                              
 Colombia peso  COP=         3948.71           -0.47
 Peru sol                     3.7947           -0.51
  PEN=PE                              
 Argentina peso             838.9000           -0.06
 (interbank)  ARS=RASL                
                                      
 Argentina peso                 1065            1.88
 (parallel)  ARSB=                    
                                      
 

 (Reporting by Shashwat Chauhan in Bengaluru; 
Editing by Alexander Smith and Diane Craft)
 ((Shashwat.Chauhan@thomsonreuters.com;))