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EMERGING MARKETS-Latam assets tumble as China raises tariffs on U.S. goods

Credit: REUTERS/Thomas White

Latin American currencies and stocks fell on Monday after China said it will impose higher tariffs on a range of U.S. goods, days after U.S. President Donald Trump hiked tariffs on $200 billion worth of Chinese goods.

By Agamoni Ghosh

May 13 (Reuters) - Latin American currencies and stocks fell on Monday after China said it will impose higher tariffs on a range of U.S. goods in response to U.S. President Donald Trump hiking tariffs on $200 billion worth of Chinese goods.

MSCI's index of Latin American stocks .MILA00000PUS fell nearly 2% after Beijing struck back.

Currencies in the region also followed suit, with MSCI's emerging market currency index .MIEM00000CUS wiping out all of its 2019 gains on Monday as the tariff re-escalation rattled global markets.

Brazil's benchmark Bovespa index .BVSP slumped more than 2%, led by losses in the financial sector, while the real BRL= currency slipped about 1% to near its lowest since October 2018.

Brazil's domestic outlook continued to darken, with the central bank's weekly survey of nearly 100 financial institutions showing the median 2019 growth forecast was trimmed further to 1.45%. That is the bleakest outlook so far this year.

Mexican stocks .MXX fell about 1% while the peso MXN= outperformed their regional peers.

Investors closely watched developments related to Pemex as the government announced measures to help the state oil company, including renewing credit lines with JP Morgan, HSBC and Mizuho, as well as a gradual tax reduction for the firm.

Cash-strapped Pemex has the largest debt among all state oil firms in Latin America.

Chile's peso CLP= fell over 1%, tracking a dip in the price of copper CMCU3, the country's top export, while stocks on the IPSA index .SPCLXIPSA fell to their lowest since December 2017.

Asset managers JP Morgan and UBS have reduced their exposure to emerging market assets in recent days, while Citi said its clients made record outflows on emerging market FX for a third straight week.

Key Latin American stock indexes and currencies at 1425 GMT

Stock indexes

Latest

daily % change

YTD % change

MSCI Emerging Markets .MSCIEF

1016.23

-1.67

7.02

MSCI LatAm .MILA00000PUS

2593.60

-2.36

3.52

Brazil Bovespa .BVSP

92375.14

-2

5.11

Mexico IPC .MXX

42565.65

-1.88

2.22

Chile IPSA .SPCLXIPSA

4994.74

-1.11

-1.11

Argentina MerVal .MERV

32541.56

-2.55

7.42

Colombia IGBC .IGBC

12517.16

-1.14

12.32

Currencies

Latest

daily % change

YTD % change

Brazil real BRBY

3.9910

-1.19

-16.98

Mexico peso MXN=D2

19.1675

-0.38

2.77

Chile peso CLP=CL

694.1

-1.24

-11.45

Colombia peso COP=

3294.08

-0.67

-9.47

Peru sol PEN=PE

3.328

-0.39

-2.73

Argentina peso (interbank) ARS=RASL

45.5500

-1.43

-59.17

(Reporting by Agamoni Ghosh; Editing by Jeffrey Benkoe)

((Agamoni.Ghosh@thomsonreuters.com; +918067491130; Reuters Messaging: Agamoni.Ghosh.thomsonreuters.com@reuters.net))

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

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