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Ambar Warrick

China measures, Italian banks lift European shares to record close

17 Feb 2020

European shares hit a record high close on Monday as a rally in Italian banks and fresh attempts by China to limit the economic impact of the coronavirus outbreak lifted investor spirits.

UPDATE 1-European shares hit record high; carmakers cheer China stimulus

17 Feb 2020

* Germany's DAX hits record high (Adds comment, updates prices)

European shares end flat, Irish stocks battered after election

10 Feb 2020

Deal talks and a rally in defensive sectors supported European shares on Monday as investors grappled with the potential impact of the coronavirus, while Irish stocks were hit by a strong showing for the left-wing Sinn Fein in a national election.

UPDATE 1-European shares rebound as China markets stabilise; resources rally

04 Feb 2020

* Markets may be seeing some "relative" bargain buying - analyst (Adds comment, details, updates prices)

European shares inch up as Coronavirus concerns discourage big moves

03 Feb 2020

European shares inched up on Monday, recovering from their worst week in nearly seven months as jitters remained over the economic fallout from a virus outbreak in China.

EMERGING MARKETS-Brazil's real at record low as coronavirus fears rattle Latam assets

31 Jan 2020

* Real eyes worst month since August, potentially oversold * Mexican peso eyes mild monthly gains * Composite Latam stock, currency indexes at 1-mth lows (Adds details, updates prices) By Ambar Warrick Jan 31 Brazil's real hit a record low on Friday, while risk assets across Latin America were sold down as investors were harried by the declaration of the China coronavirus outbreak as a global health emergency. The coronavirus epidemic, which has caused widespread disruption across China and claimed over 200 lives, was declared a global emergency on Thursday by the World Health Organization, in the wake of its spread to several other countries. The move created further uncertainty over the economic fallout in the world's second largest economy, which is also a major export destination for Latin America. Composite regional stock and currency indexes touched over one month lows. "The current weakness in Latin American markets has been driven by risk-off sentiment surrounding the coronavirus in China and neighboring countries, which has hit sentiment, pushed down commodity prices, and now may be starting to disrupt supply chains," said John Ashbourne, senior emerging markets economist at Capital Economics. Brazil's real weakened as much as 1% to 4.286, its weakest level ever against the dollar. The currency, which was set for its worst month in six, was further pressured by expectations of an interest rate cut by Brazil's central bank next week, which will push rates further into record-low territory. "The main sign that (the real) could be oversold is a strong devaluation since the coronavirus outbreak," said Wilson Ferrarezi, economist at TS Lombard in Sao Paulo, adding that predictions of the rate cut were also making Brazil's currency less attractive as a carry trade. The Brazilian stock index was on course for its first monthly decline in five, shedding about 1.6% for the day. The Mexican peso, which has recently garnered attention as a possible alternative to the real for carry trade, weakened about 0.5%. The currency was also set to log small gains for the month. Mexico maintained its economic growth forecast of 2% for 2020, after seeing its economy shrink in 2019, its first recession in a decade. Mexican stocks fell more than 1%. The Chilean peso touched its weakest level to the dollar in nearly two months, as prices of copper, the country's top export, remained near five-month lows on worries about demand from its top consumer, China. Data showed Chilean manufacturing production rose for a second straight month in December, bucking dire predictions of a slump in output following nearly two months of protests. Chile's stock index added about 0.5%. Argentine assets dropped as the country's government gave a Feb. 3 deadline for bondholders to accept its proposal to postpone a $250 million sovereign debt repayment. Key Latin American stock indexes and currencies at 1900 GMT Stock indexes Latest Daily % change MSCI Emerging Markets 1060.55 -1.14 MSCI LatAm 2750.24 -1.82 Brazil Bovespa 113680.12 -1.6 Mexico IPC 44244.09 -1.38 Chile IPSA 4574.31 0.51 Argentina MerVal 39877.69 -1.281 Colombia COLCAP 1631.49 -0.41 Currencies Latest Daily % change Brazil real 4.2838 -0.61 Mexico peso 18.8630 -0.48 Chile peso 799.1 -0.35 Colombia peso 3417 -0.23 Peru sol 3.384 -0.56 Argentina peso 60.3400 -0.15 (interbank) (Reporting by Ambar Warrick and Sagarika Jaisinghani in Bengaluru Editing by Alistair Bell)

US STOCKS-Wall Street tumbles as virus outbreak raises growth fears

31 Jan 2020

* Indexes down: Dow 1.67%, S&P 1.44%, Nasdaq 1.13% (Updates to early afternoon)

EMERGING MARKETS-Brazil leads Latam assets lower as China epidemic fans growth fears

31 Jan 2020

* Brazil stocks fall over 1%, real hits record low * WHO declares coronavirus global health emergency * China's measures to contain virus will be effective - analyst * Chilean stocks gain on upbeat economic data By Sagarika Jaisinghani and Ambar Warrick Jan 31 Brazilian equities shed over 1% on Friday, while the real hit a new record low, as investors grew anxious about economic growth after the China coronavirus outbreak was declared a global health emergency. A basket of Latin American stocks was down 1.6%, eyeing its biggest weekly decline in over five months, while its counterpart tracking regional currencies was off about 0.2%. The coronavirus epidemic, which first emerged in China's Hubei province, has now spread to 23 countries and has claimed over 200 lives, prompting travel restrictions from the United States and other countries. Although the World Health Organization declared the virus a global emergency on Thursday, it opposed restrictions on travel and trade with China and praised Beijing's efforts to contain the outbreak. "We believe China's aggressive measures to contain the virus will ultimately prove effective," said Mark Haefele, chief investment officer at UBS Global Wealth Management. "In our base case, we expect the outbreak of the virus not to cause a global economic slowdown and as such risk assets should stay well supported over the next six months." Still, risk appetite was dented on Friday after several businesses said they were facing supply problems because of the virus, with the travel, tourism and retail sectors being hit particularly hard. The Brazilian stock index was on course for its first monthly decline in five, also pressured by sluggish economic growth. The real, which has eased for three days in a row, hit an all-time low of 4.2791 to the dollar. "The main sign that (the real) could be oversold is a strong devaluation since the coronavirus outbreak," said Wilson Ferrarezi, economist at TS Lombard in Sao Paulo. The Brazilian central bank cut interest rates aggressively last year in order to kick-start the economy. A new Reuters poll on Friday showed economists expected the bank to cut rates again when it meets next week. Predictions of the rate cut were also making Brazil's currency less attractive for a carry trade, Ferrarezi added. The Chilean peso, which is sensitive to fluctuations in copper, eased 0.2% as prices of the red metal remained near five-month lows on worries about demand from its top consumer, China. In a bright spot, Chilean equities added about 0.4%, as data showed manufacturing production rose for a second straight month in December, bucking dire predictions of a slump in output following nearly two months of protests. The Argentinian MerVal was down about 0.4%, while Colombian equities fell 0.2%. Key Latin American stock indexes and currencies at 1515 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1060.99 -1.1 MSCI LatAm 2757.73 -1.55 Brazil Bovespa 113543.46 -1.72 Mexico IPC 44464.10 -0.89 Chile IPSA 4570.81 0.44 Argentina MerVal 40243.85 -0.374 Colombia COLCAP 1635.39 -0.17 Currencies Latest Daily % change Brazil real 4.2734 -0.37 Mexico peso 18.8850 -0.60 Chile peso 797.9 -0.20 Colombia peso 3422.21 -0.39 Peru sol 3.3758 -0.32 Argentina peso 60.3200 -0.11 (interbank) (Reporting by Sagarika Jaisinghani in Bengaluru; Editing by Andrea Ricci)

EMERGING MARKETS-Latam assets plummet as coronavirus fears erode risk appetite

30 Jan 2020

* Virus fears spur continued selling of risk assets * Mexican peso drops as economy shrinks in 2019 * Growth conditions in Brazil and Mexico look dim -analyst (Adds details, updates prices) By Shreyashi Sanyal and Ambar Warrick Jan 30 Stocks and currencies in Latin America fell on Thursday, as a rising death toll and increased cases of the Chinese coronavirus brewed widespread fears over its economic impact. A bout of panic selling took over global financial markets as the death toll from the Wuhan coronavirus rose to 170, with more than 8,100 patients infected. Latin American assets have been hit particularly hard by the perceived demand disruptions in China, which is one of the region's largest export destinations. "Given expectations of further escalation in the numbers of infections and deaths related to the coronavirus, anxiety, nervousness and market pessimism internationally should increase globally in the short term," Chetan Sehgal, lead portfolio manager at Templeton Emerging Markets Investment Trust, wrote in a note. The Mexican peso marked its worst drop to the dollar in more than two months, after data showed that Latin America's No. 2 economy contracted for the first time in a decade last year. Nagging uncertainty over the economic management of Mexican President Andres Manuel Lopez Obrador has resulted in laggard business activity, a weakness that is expected to persist in 2020. Mexican stocks dropped about 0.7%. "Growth conditions in Brazil and Mexico continue to look dim as economic momentum can at best to be said to be treading water," TD Securities wrote in a note. Brazil's real touched its weakest level against the dollar in two months. Stocks sank to a more-than one month low. Brazilian Economy Minister Paulo Guedes said the government will submit its administrative reform proposals to Congress "in a week or two" and said the government would do all that it could to pass tax reforms this year. The intended reforms are part of several promised by President Jair Bolsonaro to free up government spending and improve infrastructure. Chile's peso weakened 0.7% against the dollar, hitting levels not seen since early December. Chile's central bank held its benchmark interest rate on Wednesday, as it seeks to steady a wavering economy following months of intense and often violent protests. MSCI's index for Latin American currencies fell 1%, while its index for stocks declined more than 2%. The Argentine peso and stocks were flat. The country will make an offer to creditors for the restructuring of its debt in the second week of March, with a looming presidential deadline for dealing with public debt. Latin American stock indexes and currencies at 1910 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1068.61 -2.63 MSCI LatAm 2768.63 -2.22 Brazil Bovespa 113350.48 -1.76 Mexico IPC 44832.23 -0.67 Chile IPSA 4550.75 -0.51 Argentina MerVal 40348.40 0.017 Colombia COLCAP 1630.47 -0.2 Currencies Latest Daily % change Brazil real 4.2622 -1.03 Mexico peso 18.8445 -0.81 Chile peso 797.35 -0.73 Colombia peso 3408.5 -0.69 Peru sol 3.365 -0.62 Argentina peso 60.2500 -0.01 (interbank) (Reporting by Shreyashi Sanyal in Bengaluru; editing by Jonathan Oatis and Grant McCool)

EMERGING MARKETS-Latam markets muted amid coronavirus uncertainty; Mexico up on trade deal

29 Jan 2020

* Chilean central bank rate decision awaited * Brazil's real down after surprise Dec deficit * China virus prompts widespread caution (Adds details, updates prices) By Ambar Warrick Jan 29 Most Latin American assets edged lower on Wednesday as the markets continued to assess the Chinese virus epidemic, while Mexico's stocks and currency drew mild support from the U.S. signing of a new North American trade agreement. An increasing death toll from the Wuhan virus, as well as comments that China's economic growth may drop to 5% or even lower due to the virus, cast a pall over financial markets. China, the world's second-largest economy, is a key export destination for Latin American goods. Any economic disruptions by the virus would dent demand in the country, and would likely be reflected across the region. "It is too early at this stage to make any reliable estimate of the future trajectory of this virus – which is what markets require to find more solid ground," Rabobank analysts wrote in a note. Mexico's peso strengthened slightly to the dollar after U.S. President Donald Trump signed a new U.S.-Mexico-Canada trade agreement, introducing tougher rules on labor but leaving about $1.2 trillion in annual trade flows between the countries largely unchanged. Mexican stocks were also higher, gaining for a second straight session after fears over the Chinese virus' economic impact had triggered a mass exodus from risk assets across the globe. Brazil's real dropped after the government reported a primary budget deficit for December, as opposed to expectations of a surplus for the month. However, the overall budget shortfall for 2019, before interest payments, was about 1.3% of the country's GDP, as compared with a 1.7% deficit in 2018. Stocks in Latin America's largest economy were also lower on the day. Brazilian central bank figures showed bank lending and the financial health of borrowers ending 2019 on a positive note, as default ratios and lending spreads fell against a backdrop of strong credit growth. The Chilean peso touched its weakest level to the dollar in nearly two months, ahead of the Central Bank of Chile's decision on interest rates, expected at 2100 GMT. The bank is widely expected to stand pat on its rates while the economy recovers from the impact of violent anti-government protests, which erupted in October. The protests had caused the peso to fall nearly 15%, prompting sustained intervention by the central bank to support the currency. Markets showed little reaction after the U.S. Federal Reserve held rates steady at its Wednesday meeting, and gave no new guidance about its measures to maintain short-term liquidity in bank funding markets. Key Latin American stock indexes and currencies at 1910 GMT Stock indexes Latest Daily % change MSCI Emerging Markets 1097.88 -0.35 MSCI LatAm 2841.58 0.17 Brazil Bovespa 116216.53 -0.23 Mexico IPC 45143.84 0.95 Chile IPSA 4573.24 0.06 Argentina MerVal 40569.42 -0.637 Colombia COLCAP 1633.50 0.54 Currencies Latest Daily % change Brazil real 4.2222 -0.68 Mexico peso 18.6857 0.16 Chile peso 791.5 -0.39 Colombia peso 3385.8 -0.04 Peru sol 3.344 -0.18 Argentina peso 60.2300 -0.08 (interbank) (Reporting by Ambar Warrick in Bengaluru Editing by Marguerita Choy)

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