March 6, 2019 / 9:38 PM / 7 months ago

EMERGING MARKETS-Latam stocks near 2019 low led by Argentina slump, FX weakens

 (Recasts throughout, updates prices, adds market strategist's
    By Agamoni Ghosh
    March 6 (Reuters) - Latin American stocks hovered near 2019
lows on Wednesday led by steep losses in Argentina and Brazil
which resumed trading after a two-day Carnival holiday, while
currencies of oil exporters in the region fell as crude prices
came under pressure. 
    MSCI's index of Latin American stocks fell
1.3 percent, tracking losses across the region, barring Chile
and Colombia which ended higher.
    Argentina's Merval index as well as its peso
led declines across the board on private purchases of U.S.
dollars in the face of high inflation as markets resumed trading
after the Carnival holidays. 
    Argentina is going through a crisis that originated in 2018
due to an abrupt depreciation of the peso, resulting in a
prolonged recession and very high inflation.
    Analysts ascertain that economic indicators and currency
moves will be closely linked to the presidential elections
scheduled in the second half of the year. 
    "Volatility (on the ARS=) is likely to remain high,
especially as we enter the election season," said Citi analysts
in a note.  
    Sao Paulo-traded stocks which resumed trade after
Carnival holidays for a shorter session, dropped 0.4 percent led
by declines in the consumer and financial sectors with meat
processor JBS being the biggest drag on the index.
    Despite the sharp drop on the index, miner Vale
rose over 2 percent after Brazil's mining minister called the
firm vital to the country's economy despite a dam disaster that
killed more than 300 people.   
    Mexico's IPC index fell about half a percent
reversing earlier gains which came after central bank board
member Jonathan Heath said the country was a "long way" from
losing its investment grade rating.
    Material and industrial stocks weigh on the index with
chemical manufacturer Alpek emerging as the biggest
    Peru's benchmark index closed lower hit by the
decline in financial and consumer sector, despite the advance of
some miners in the face of the rebound in copper prices.
    Stocks in Chile and Colombia were the
only gainers in the region, with the latter hitting a four-month
    Most currencies in the region slid on the day, with Mexico
and Colombia's pesos buckling under pressure from
oil prices. 
    Brazil's real fell over 1.5 percent hurt both by oil
price pressures and as investors adjusted positions after
returning from the extended Carnival weekend. 
    Key Latin American stock indexes and currencies at 2120 GMT
 Stock indexes                        daily %
                             Latest    change
 MSCI Emerging Markets       1054.78    -0.03
 MSCI LatAm                  2733.35    -1.36
 Brazil Bovespa             94206.88    -0.42
 Mexico IPC                 41914.27    -0.51
 Chile IPSA                  5256.07     0.50
 Argentina MerVal           32340.43    -4.42
 Colombia IGBC              12467.15     0.79
 Currencies                           daily %
 Brazil real                 0.26039    -1.61
 Mexico peso                 19.3470    -0.52
 Chile peso                   659.55    -0.32
 Colombia peso               3101.63    -0.15
 Peru sol                      3.307     0.06
 Argentina peso              40.7000    -2.01

 (Reporting by Agamoni Ghosh in Bengaluru; Editing by Lisa
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