December 31, 2018 / 5:35 PM / 6 months ago

EMERGING MARKETS-Latam currencies and stocks set to end year lower

 (There will be no LATAM-focused emerging markets report on Jan.
1, the New Year holiday. Reuters will resume coverage from Jan.
    * Brazil's Bovespa up almost 15 pct in 2018
    * Argentine peso halved in value against the dollar 
    * Mexico stocks have steepest annual fall in a decade 

    By Agamoni Ghosh
    Dec 31 (Reuters) - Latin American currencies and stocks were
on track to end the year lower on Monday, with stocks on
Mexico's benchmark index set to mark the steepest annual fall in
a decade, while the peso gained against a soft dollar on the
last trading day of 2018.  
    Despite a tumultuous year for developing economies, MSCI's
index for Latin American stocks outperformed the
over-all emerging markets index, boosted mainly by
gains from Brazil's Bovespa, one of the top-performing 
indexes this year.
    With most markets in the region shut for the New Year
holiday, Mexico's main stock index gained in a session
with low volume but was set to record its worst quarter in more
than 17 years, mainly due to doubts about the new leftist
government and concerns over global growth and trade.
    President Andres Manuel Lopez Obrador rattled financial
markets in October when he said he would scrap a partly built
$13 billion airport on the basis of a straw poll that was widely
    Market sentiment was also hammered by a bill drafted by
Lopez Obrador's National Regeneration Movement to limit bank
fees and another to regulate the mining sector.
    "Those decisions were not well-received and the unease has
persisted among investors," said James Salazar, economist at CI
    Currencies in Latin America dipped more than 5 percent this
year as rising U.S. borrowing costs reduced the attractiveness
of emerging market assets earlier in 2018, leading to capital
flows out of many developing countries.
    The worst casualty for currencies not just for Latin America
but emerging-markets as a whole was Argentina's peso,
which halved in value against the dollar as the country plunged
into financial crisis. 
    Runaway inflation has led Argentina to raise benchmark
interest rates dramatically - first to 45 percent, then to 60
percent - pushing its economy into recession and prompting it to
turn to the International Monetary Fund for a funding facility
to shore up its finances and halt the currency's plunge.
    Key Latin American stock indexes and currencies at 1715 GMT
 Stock indexes                             daily %     YTD %
                               Latest       change    change
 MSCI Emerging Markets            966.95      0.45     -16.9
 MSCI LatAm                      2564.38     -0.19     -9.15
 Brazil Bovespa                        -         -         -
 Mexico IPC                     41533.06      0.18    -15.85
 Chile IPSA                            -         -         -
 Argentina MerVal                      -         -         -
 Colombia IGBC                         -         -         -
 Currencies                                daily %     YTD %
                                            change    change
 Brazil real                           -         -         -
 Mexico peso                     19.6468      0.02      0.27
 Chile peso                            -         -         -
 Colombia peso                         -         -         -
 Peru sol                          3.375     -0.09     -4.09
 Argentina peso (interbank)            -         -         -

 (Reporting by Agamoni Ghosh in Bengaluru; Additional reporting
by Sheky Espejo; Editing by Dan Grebler)
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