Latin American Markets Struggling On Reduced Growth Prospects For China, Weak Data At Home


Latin American markets are broadly lower after the International Monetary Fund trimmed its growth forecast for China this year by 0.25 percentage points to 7.75%, sparking fresh worries that demand for raw goods produced throughout the region and sold to the world's second largest economy won't be increasing any time soon.

The IMF forecast remains above the Chinese government's own projections for 7.5% growth this year, but is largely in line with other recent revisions, including those from America - Merrill Lynch, which pared its forecast this month to 7.6% from 8%, and Standard Chartered, which cut its estimate to 7.7% from 8.3%.

Here's where the regional markets stand today:

- Ibovespa was down 1,019.07 a short time ago. Now -1,092.50 (-2%) to 54,958.9.

- IPC (Mexico City) was down 190.99. Now down 226.7 (-0.6%) to 40,535.1.

- Santiago Index IPSA down 13.9 (-0.34%) to 4,124.9.

- Merval Buenos Aires down 23.70 (-0.7) to 3,397.9.

New economic data from the region also is weighing on equities today, with the latest GDP figures from Mexico continuing to show economic growth slowing.

Gross domestic product fell for the fourth time in a row on an annual basis, while on a quarterly basis, the data posted its fourth quarterly growth below 1% - making it increasingly likely Mexico will have a tough time reaching 3% yearly growth this year.

Also, the Brazilian Institute for Statistics and Geography (IBGE) reported a 5.8% unemployment rate in April, up from the prior month but remaining quite low relative to recent Brazilian history.

Among individual stocks today, Ecopetrol SA ( EC ) is narrowly lower today, with U.S.-traded shares of the Columbian energy company slipping about 0.2% - giving back an early 0.7% gain - after closing on a COP$1.84 trillion ($37.5 bln) liability management transaction and a loan agreement for with a consortium of seven Colombian banks.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

Referenced Stocks: EC

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