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 Ecuador imports
By Johann M Cherian
April 14 (Reuters) - Stocks and currencies across most Latin American markets rose on Tuesday on expectations 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 1.3%, while an index tracking currencies .MILA00000CUS added 0.8% as the safe-haven dollar slipped.
Both indexes have recouped their losses since the start of the conflict in late February, with the currencies benchmark at a record high.
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.
Data showing that a third Iran-linked tanker was entering the Gulf via the Strait of Hormuz was a relief to investors worried about supply disruptions since the war. Oil prices LCOc1 fell over 1% and slipped below $100 a barrel.
"If further progress in U.S.-Iran negotiations is achieved, peak pricing of the negative global growth shock is likely behind us," analysts at Deutsche Bank said in a note.
Oil-deficient Chile's peso CLP= appreciated 0.6%, the most among major economies in Latam, while Brazil's real BRL= firmed 0.4% and Mexico's peso MXN= climbed 0.4%.
On the other hand, energy companies such as Petrobras PETR4.SA slipped 1.6%, Ecopetrol ECO.CN lost 2.1% and Argentina's YPF YPFDm.BA fell 1.5%, tracking weaker oil prices.
GROWTH WORRIES LOOM
Despite the optimism, uncertainties prevailed over the repercussions the month-long conflict could have had.
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 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 are 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 elections.
The local stocks index .BVSP edged up 0.5% and hit a fresh record high.
Meanwhile, Argentine bonds 040114HW3=1M, 040114HU7=1M were marginally higher and the local peso ARS=RASL edged up 0.5% after a report said 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.
A consumer inflation report is also due this week and economists polled by Reuters expect inflation to cool this year by less than previously expected.
Peru's sol PEN= slipped 0.5%. Elections over the weekend showed conservative candidate Keiko Fujimori will advance to a presidential runoff as she held 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. The local peso COP= edged up 0.2%.
Key Latin American stock indexes and currencies at 14:46 GMT:
Stock indexes
Latest
Daily % change
MSCI Emerging Markets .MSCIEF
1569.94
2.21
MSCI LatAm .MILA00000PUS
3379.83
1.29
Brazil Bovespa .BVSP
198939.98
0.47
Mexico IPC .MXX
69753.16
0.23
Chile IPSA .SPIPSA
11280.49
1.33
Argentina MerVal .MERV
2988140.48
-0.12
Colombia COLCAP .COLCAP
2359.49
0.52
Currencies
Latest
Daily % change
Brazil real BRL=
4.9774
0.37
Mexico peso MXN=
17.2344
0.38
Chile peso CLP=
886.89
0.67
Colombia peso COP=
3578.47
0.24
Peru sol PEN=
3.3889
-0.56
Argentina peso (interbank) ARS=RASL
1,348.0
0.52
Argentina peso (parallel) ARSB=
1,385.0
0.36
(Reporting by Johann M Cherian in Bengaluru; Editing by Andrea Ricci )
((johann.mcherian@thomsonreuters.com))
