Emerging Markets: Brazil stocks lead Latam gains as Middle East tensions drive oil, yields higher

Petroleo Brasileiro SA Petrobras

01/09/2026 16:45

MSCI Latam stocks up 1.4%, FX gain 0.5%
Brazil's Q2 GDP tops forecasts but slowdown looms
Argentina's August agricultural export revenue up 51%
Chile's economic activity falls unexpectedly in July
By Avinash  P
Sept 1 (Reuters) - Most Latin American stocks rose on Tuesday, led by Brazilian equities, as investors weighed renewed fighting in the Middle East, which kept oil prices and global bond yields elevated, alongside a fresh batch of regional economic data.    
The MSCI Latin America equities index MILA00000PUS gained 1.4%, while São Paulo's Bovespa .BVSP climbed 1.9%, putting it on track for a 10th straight session of gains, its longest winning streak since November 2025.
Brazil's oil production rose 13.6% year-on-year in July to a record 4.5 million barrels per day. State-run oil company Petrobras PETR4.SA rose 3%, providing the biggest boost to the benchmark index.
Brazil's economic growth slowed in the second quarter as elevated borrowing costs continued to weigh on activity, though the expansion was slightly stronger than expected thanks to a robust performance from the farm sector, data showed.
"Economic activity slowed in Q2 after a strong start to the year, but the headline was more resilient than the underlying domestic economy," said Andres Abadia, chief LatAm economist at Pantheon Macroeconomics.
"The data therefore reinforce our view that restrictive monetary policy is gradually gaining traction, rather than pointing to an abrupt downturn."
The Brazilian real BRL= gained 0.7%. 
Oil prices rose after U.S. President Donald Trump threatened further strikes against Iran after the first direct exchange of attacks between the two countries since late July, supporting Latin American oil exporters.
Broader sentiment, however, remained cautious as a global bond selloff deepened, with investors assessing the economic impact of the conflict and the risk that higher borrowing costs could fuel inflation pressures.
Higher global bond yields are typically a headwind for emerging market assets because they increase the appeal of developed-market debt and reduce demand for riskier investments.
A stronger dollar left regional currencies mixed overall, although MSCI's Latam currency gauge .MILA00000CUS rose 0.5%.
Mexico's stock index .MXX was muted. Uncertainty surrounding stalled North American free trade negotiations is deterring new investment and prompting some companies already operating in Mexico to consider alternative locations.
Chile's peso CLP= fell 0.3%. The country's economic activity contracted in July, central bank data showed, missing market expectations due to a slowdown in the key mining sector.
Argentina's agricultural exports totaled $2.75 billion in August, grain exporters' chamber CIARA-CEC said, up 51% from the same month a year earlier.
Argentina's Merval stock index .MERV rose 1.6%, while the peso ARS=RASL slipped 0.2%.
        
Key Latin American stock indexes and currencies at 1307 GMT:
  
Latin American market prices from Reuters


Equities
Latest
Daily % change
MSCI Emerging Markets .MSCIEF
1726.91
0.44
MSCI LatAm .MILA00000PUS
3096.51
1.44
Brazil Bovespa .BVSP
180767.59
1.89
Mexico IPC .MXX
65419.25
-0.02
Chile MSCI index .MICL00000PUS
1689.40
0.56 
Argentina Merval .MERV
3081105.62
1.558
Colombia COLCAP .COLCAP
2468.67
1.8



Currencies
Latest
Daily % change
Brazil real BRL=
5.1459
0.71
Mexico peso MXN=
16.957
0.13
Chile peso CLP=
936.76
-0.32
Colombia peso COP=
3181.03
1.19
Peru sol PEN=
3.363
0.04
Argentina peso (interbank) ARS=RASL
1511.5
-0.17
Argentina peso (parallel) ARSB=
1525
1.97



 (Reporting by Avinash P in Bengaluru. Editing by Mark Potter)
 ((Avinash.P@thomsonreuters.com;))