Latam assets rebound as US-Iran talks expected to resume, easing oil concerns
IMF lowers 2026 growth outlook for EM, warns of recession risk if conflict escalates
Brazil election poll shows Lula ahead; Peru runoff set with Fujimori
Colombia reverses plan for 100% tariffs on Ecuadorean imports
Updates with afternoon trading
By Johann M Cherian and Twesha Dikshit
April 14 (Reuters) - Stocks and currencies across most Latin American markets rose on Tuesday with investors optimistic that the United States and Iran would continue negotiations to end the conflict in the Middle East that has rattled global markets.
MSCI's index tracking equities in the region .MILA00000PUS rose 0.8%, trading at multi-year highs. A corresponding index tracking currencies .MILA00000CUS added 0.6% as the safe-haven dollar slipped.
Both indexes have recouped their losses since the start of the conflict with Iran in late February, with the currencies benchmark at a record high.
"The peak EM FX sell-off did not look particularly dramatic compared to other sharp risk-off periods, while several currencies are already trading at levels stronger versus the USD than before the war started," JPMorgan analysts said in a note, while stating a preference for Latam and EMEA EM FX.
Negotiating teams from Washington and Tehran could return to Islamabad this week to resume talks to end the war, sources told Reuters, after the collapse of weekend negotiations prompted Washington to impose a blockade on Iranian ports.
Oil prices LCOc1 fell over 1% and slipped below $100 a barrel.
Oil-deficient Chile's peso CLP= appreciated 0.8%, the most among major economies in Latam, while Colombia's peso COP= and Mexico's peso MXN= firmed 0.2% each.
Energy companies' share prices fell, with Petrobras PETR4.SA down 4.2%, Ecopetrol ECO.CN down 4.4% and Argentina's YPF YPFDm.BA down 2.2%, tracking weaker oil prices.
GROWTH WORRIES LOOM
Despite optimism over the prospects for peace talks, uncertainties remained regarding the economic repercussions of the month-long conflict.
The International Monetary Fund lowered its outlook for global growth and warned that the global economy would teeter on the brink of recession if the conflict worsens and if oil stays above $100 per barrel through 2027.
The fund lowered its 2026 growth forecast for emerging market and developing economies to 3.9% from its view of 4.2% in January, with commodity-importing countries expected to be hit the hardest due to higher energy and food costs.
Growth in Latin America and the Caribbean, however, was revised higher by 0.1 percentage point to 2.3% for 2026, helped by exporters such as Brazil, where higher oil prices provide some relief.
Elections will be a pivotal event for Brazil later this year and a CNT/MDA poll showed that President Luiz Inacio Lula da Silva was ahead of Senator Flavio Bolsonaro in a potential runoff in the October general election.
The local stock index .BVSP edged up 0.4% and hit a record high.
Meanwhile, Argentine bonds 040114HW3=1M, 040114HU7=1M were marginally higher after a media report that the country will reach a staff-level agreement with the IMF on the second review of its $20 billion program as early as this week.
Argentina's monthly inflation rate came in higher than analyst expectations, as markets keep a close eye on the impact of the Middle East conflict on the global economy. The benchmark stock index .MERV dropped 1.2%, while the local peso ARS=RASL weakened 0.7%.
Peru's sol PEN= slipped 0.5%. Elections over the weekend showed conservative candidate Keiko Fujimori will advance to a presidential runoff after she received 16.9% of the votes, with 74% of votes counted.
Colombian President Gustavo Petro said his country would not impose 100% tariffs on imports from Ecuador, reversing an announcement made last week by the trade ministry. Local stocks added 0.6%.
The U.S. issued a Venezuela-related general license that allows financial transactions involving certain Venezuelan banks and Venezuelan government individuals, according to documents posted to the U.S. Treasury Department's website.
Key Latin American stock indexes and currencies at 19:51 GMT:
Stock indexes
Latest
Daily % change
MSCI Emerging Markets .MSCIEF
1568.52
2.12
MSCI LatAm .MILA00000PUS
3363.15
0.79
Brazil Bovespa .BVSP
198838.57
0.42
Mexico IPC .MXX
68957.47
-0.92
Chile IPSA .SPIPSA
11321.42
1.69
Argentina MerVal .MERV
2956127.86
-1.19
Colombia COLCAP .COLCAP
2360.28
0.55
Currencies
Latest
Daily % change
Brazil real BRL=
4.9903
0.12
Mexico peso MXN=
17.2557
0.26
Chile peso CLP=
885.88
0.79
Colombia peso COP=
3578.56
0.24
Peru sol PEN=
3.3881
-0.54
Argentina peso (interbank) ARS=RASL
1,365.0
-0.74
Argentina peso (parallel) ARSB=
1,390.0
0
(Reporting by Johann M Cherian and Twesha Dikshit in Bengaluru; Editing by Andrea Ricci and Edmund Klamann)
((johann.mcherian@thomsonreuters.com))
