February 28, 2019 / 10:07 PM / 4 months ago

EMERGING MARKETS-Latam stocks, FX sink on receding trade optimism, Trump-Kim meet

 (Recasts throughout, updates prices, adds market strategist's
quote)
    By Agamoni Ghosh
    Feb 28 (Reuters) - Latin American stocks and currencies fell
on Thursday as concerns about Sino-U.S. trade relations, weak
Chinese data and an abrupt end to a U.S.-North Korea summit
shrunk risk appetite. 
    MSCI's index of Latin American stocks fell
over 2 percent, dragged by heavy losses in Argentina and
Brazil, while currencies in the region stumbled against
the dollar after strong GDP numbers from the U.S. boosted the
greenback. 
    Global equities faltered on the day as data from China 
showed factory activity contracted to a three-year low, while
its exports fell at their fastest pace since the global
financial crisis a decade ago. 
    Adding to that, receding optimism on the U.S.-China trade
talks and an abrupt end to a meeting between U.S President
Donald Trump and North Korean leader Kim Jong Un on
denuclearization, dampened sentiment.
    Apart from the external factors, the Bovespa's fall of 1.7
percent was aided by data reflecting slow growth for Q4 in
Brazil and doubts regarding implementation of the crucial
pension reform in its original form.
    Local news website UOL reported that President Jair
Bolsonaro may tweak certain pension reform points which raised
concerns about a "dehydration" of the original proposal.
    "The approval of the pension reform is going to be
protracted process and its going to be a bumpy road ahead," said
Alejo Czerwonko, emerging markets strategist, UBS Global Wealth
Management.
    "We do however, envision a constructive ending but think
this will get approved with manageable  pollution," he added.
    EDP Brasil was the biggest drag on the index as a
result of the inflow of resources after the sale of small
hydroelectric plants to the Norwegian Statkraft            .

    Stocks in Mexico fell over 1 percent, while investors
closely watched developments related to Pemex which announced
auctions to pick joint venture partners despite President Andres
Manuel Lopez Obrador scrapping such a move earlier.
 
    In currencies, Argentina's peso led losses, while the
Mexican and Colombian pesos shed over 4 percent
tracking lower oil prices. 
    Chile's peso fell about 1 percent tracking a gain dip
in the price of copper, while stocks on the IPSA index
 slipped to its lowest in seven weeks. 

    Key Latin American stock indexes and currencies at 2130 GMT
    
 Stock indexes                             daily %
                               Latest       change
 MSCI Emerging Markets           1050.95     -0.97
                                          
 MSCI LatAm                      2821.18      -1.9
                                          
 Brazil Bovespa                 95584.35     -1.77
                                          
 Mexico IPC                     42826.84     -1.12
                                          
 Chile IPSA                      5287.54     -1.58
                                          
 Argentina MerVal               34485.80     -2.43
                                          
 Colombia IGBC                  12221.34     -0.88
                                          
                                                  
 Currencies                                daily %
                                            change
                                  Latest  
 Brazil real                      3.7558     -0.09
                                          
 Mexico peso                     19.2710     -0.56
                                          
 Chile peso                       655.45     -1.00
                                          
 Colombia peso                   3080.25     -0.37
 Peru sol                          3.298     -0.06
                                          
 Argentina peso (interbank)      39.1100     -0.72
                                          
 

 (Reporting by Agamoni Ghosh in Bengaluru
Editing by Alistair Bell)
  
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