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EMERGING MARKETS-Latam currencies weaken, Brazil shares break 6-session losing streak

Credit: REUTERS/RODRIGO GARRIDO

Brazil's real slid to a one-month low on Monday, leading a decline across major currencies in Latin America, while Sao Paulo-listed stocks ended a six-session losing streak amid a rally in global markets fueled by trade optimism.

By Susan Mathew

Jan 13 (Reuters) - Brazil's real slid to a one-month low on Monday, leading a decline across major currencies in Latin America, while Sao Paulo-listed stocks ended a six-session losing streak amid a rally in global markets fueled by trade optimism.

Extending losses to a third session, the real BRL= weakened 1% against a steady dollar, and the currency of oil exporter Colombia COP= dropped 0.2% as crude prices slipped, while those of Mexico MXN= and Chile CLP= traded flat. FRX/O/R

Broader emerging market currencies .MSCIEF rallied on hopes that the United states and China would ink a trade deal this week, a moves towards ending a trade war that has roiled markets for 18 months. MKTS/GLOB

Prolonged economic weakness in Latin America weighed on the region's currencies and an easing cycle in Mexico and Brazil saw the central banks cut interest rates four times last year.

While analysts debate the possibility of continued easing in Brazil this year as rates reached historic lows, the Mexican central bank is expected to keep cutting rates as inflation slipped further below the bank's target.

Latest data showed Mexican gross fixed investment fell 1.5% in October from the previous month.

"We do have some domestic factors in Latam that have weighed somewhat and there is a little bit of a view that this trade deal, at the margin, is benefiting other regions more than Latam," said Christian Lawrence, senior market strategist at Rabobank in New York.

While Wall Street touched record highs on trade optimism and earnings, regional stocks painted a mixed picture. .N

Brazil's benchmark Bovespa index .BVSP added 1.4%, after losing 2.6% over the last six sessions. The rally was broad-based, led by financials and material stocks, but declines in energy shares kept gains in check.

Marking their fourth straight session in the black, Mexican shares .MXX rose 0.5% with conglomerate Orbia Advance Corporation ORBIA.MX jumping up to 14% on reports that several companies are interested in buying its vinyl business.

Colombian equities .COLCAP fell for the third time in four sessions, while Argentine shares .MERV shed 1.6% after two day of gains.

Key Latin American stock indexes and currencies at 2003 GMT:

Stock indexes

Latest

Daily % change

MSCI Emerging Markets .MSCIEF

1144.55

0.96

MSCI LatAm .MILA00000PUS

2909.46

-0.29

Brazil Bovespa .BVSP

117143.45

1.42

Mexico IPC .MXX

44887.23

0.51

Chile IPSA .SPIPSA

4958.79

-0.75

Argentina MerVal .MERV

42036.21

-1.648

Colombia COLCAP .COLCAP

1650.79

-0.25

Currencies

Latest

Daily % change

Brazil real BRBY

4.1419

-0.04

Mexico peso MXN=D2

18.7943

-0.07

Chile peso CLP=CL

775.2

-0.44

Colombia peso COP=

3266.75

0.04

Peru sol PEN=PE

3.332

-0.03

Argentina peso (interbank) ARS=RASL

59.9300

-0.19

(Reporting by Susan Mathew and Ambar Warrick in Bengaluru; Editing by Cynthia Osterman)

((susan.mathew@thomsonreuters.com; +91-80-6749-1130))

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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