February 26, 2018 / 5:14 PM / a year ago

EMERGING MARKETS-Chilean equities fall on lithium price worries, forestry

    RIO DE JANEIRO, Feb 26 (Reuters) - Chilean equities led
losses across the region on Monday, with the nation's blue-chip
IPSA index falling over 1 percent largely due to share
price declines in the country's lithium and forestry sectors.
    Shares in Sociedad Quimica y Minera de Chile SA (SQM)
, which has attracted investor interest due to
increasing demand for lithium from electric car makers, fell
almost 8 percent, leading losses on the index after analysts at
Morgan Stanley cut their rating on the stock to "underweight"
from "equal-weight."
    Shares in Sociedad de Inversiones Oro Blanco SA, an
investment vehicle with an indirect stake in SQM, followed as
the second-biggest loser, its shares falling almost 5 percent.
    In the Morgan Stanley note, analysts wrote that they expect
prices for lithium to peak in 2018, before falling 45 percent by
2021, as demand growth falls far short of what is needed to
absorb growing supply.
    Stocks in Chile's forestry sector also fell. Shares in
forestry firm Empresas CMPC SA and Empresas Copec SA
, which operates in forestry through subsidiary Arauco,
both slid between 2 and 3 percent, due to what traders described
as profit taking in the sector.
    Overall, the IPSA had fallen 1.15 percent in afternoon
    Elsewhere in Latin America, Mexico's IPC equities index
 also fell on Monday, as companies reported generally
unimpressive earnings figures, while December retail sales fell
0.5 percent from the previous month.
    "The Q4 corporate earnings reports weren't a positive
catalyst for the stock market," Santander analysts wrote in a
    Traders were also cautious as the seventh round of North
American Free Trade Agreement negotiations open in Mexico City,
amid continued tough talk from U.S. President Donald Trump and
little hope of a breakthrough among negotiators.
    The IPC had fallen 0.54 percent in morning trade.
    Key Latin American stock indexes and currencies at 1638 GMT:
 Stock indexes                           daily %     YTD %
                             Latest       change    change
 MSCI Emerging Markets         1221,01      0,38         5
 MSCI LatAm                    3163,00      0,03      11,8
 Brazil Bovespa               87647,26      0,41     14,72
 Mexico IPC                   48380,11     -0,54     -1,97
 Chile IPSA                    5676,67     -1,15      2,01
 Chile IGPA                   28509,29     -0,95      1,89
 Argentina MerVal             32712,28     -0,09      8,80
 Colombia IGBC                11876,96      -0,2      4,45
 Venezuela IBC                 5079,10     -1,87    -83,98
 Currencies                              daily %     YTD %
                                          change    change
 Brazil real                    3,2356      0,15      2,40
 Mexico peso                   18,6400     -0,53      5,68
 Chile peso                        587      0,73      4,71
 Colombia peso                 2846,77     -0,10      4,75
 Peru sol                        3,247      0,09     -0,31
 Argentina peso                20,0400     -0,30     -7,19
 Argentina peso                   20,2     -0,50     -4,80

 (Reporting by Gram Slattery and Felipe Iturrieta; Editing by
Susan Thomas)
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