February 13, 2019 / 10:09 PM / in 2 months

EMERGING MARKETS-Latam stocks drop as Brazil shares run out of gas

 (Recasts; updates prices, adds market strategist's quote)
    By Aaron Saldanha
    Feb 13 (Reuters) - Most Latin American stocks dropped on
Wednesday, as shares in heavyweight Brazil ran out of steam and
Mexican stocks tumbled, while Latin American currencies softened
against a stronger U.S. dollar.
    Equities in Latin America gave up much of Tuesday's surge,
which was fueled by expectations of a U.S.-China trade deal.
Regional currencies failed to hold ground against the greenback,
which strengthened after U.S. inflation data was released.

    Concerns that pension reform may not pass as quickly as
expected hurt Brazilian shares while a slide in Mexican
telecommunications firm America Movil pulled stocks in
Latin America's second-largest economy lower.
    Igor Lima, a partner at Galt Capital in Brazil, said a more
definitive articulation of Brazil pension reform was needed to
sustain a rally in local stocks.  
    MSCI's index of Latin American stocks fell
1.1 percent, while its index of Latin American currencies
 declined 0.4 percent. 
    Benchmark stocks in Brazil fell 0.3 percent, as
losses among financials and consumer staples outweighed gains in
resources firms including Vale SA and Petroleo
Brasileiro SA.   
    Brazil's real slid about 1.2 percent to almost
entirely reverse Tuesday's gains, while Mexico's peso
weakened 0.9 percent. 
    Mexican stocks posted their biggest decline in nearly
two months as investors dialed back on exposure to America
Movil.
    Shares in the firm, whose top shareholders are billionaire
Carlos Slim's family, slid 5.1 percent to a 2019 low a day after
it reported flat fourth-quarter revenue.
    Argentina's stocks benchmark fell 1.7 percent on
selling pressure from traders booking profits after Tuesday's
record closing peak, while the country's peso softened. 
    Chile's peso fell half a percent, while local stocks
 were little changed.    
    Bonds of Ecuador, which has a heavy external debt load,
traded sharply higher a day after the International Monetary
Fund confirmed it was engaged in formal talks with the
government over a possible IMF-backed financial arrangement.
 
        
    Key Latin American stock indexes and currencies at 2136 GMT
    
 Stock indexes                       Latest     Daily
                                                  pct
                                               change
 MSCI Emerging Markets                1041.84   -0.03
 MSCI LatAm                           2824.39   -1.14
 Brazil Bovespa                      95842.40   -0.34
 Mexico IPC                          42284.06   -1.92
 Chile IPSA                           5386.61    0.03
 Argentina MerVal                    37038.92   -1.72
 Colombia IGBC                       11962.22    0.07
                                                     
 Currencies                            Latest   Daily
                                                  pct
                                               change
 Brazil real                           3.7555   -0.14
 Mexico peso                          19.4260   -0.90
 Chile peso                            663.05   -0.49
 Colombia peso                        3135.86   -0.36
 Peru sol                               3.338   -0.27
 Argentina peso (interbank)           38.1800   -0.50
                                               
 

 (Reporting by Aaron Saldanha in Bengaluru and Paula Arend Laier
in Sao Paulo; Editing by Meredith Mazzilli)
  
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